“Nobody has money,” a current Afghan central bank employee told CNN. The employee, speaking anonymously out of fear for his safety, said many families did not have enough money for their daily expenses and some paychecks had been cut off.
Afghan banks are still closed, days after the Taliban ordered them and other departments to reopen, as they are virtually cash-strapped, the central bank source said.
“You have a pile of cards that are about to fall,” a person familiar with the situation of the Afghan economy told CNN. “As soon as you open the banks, it will show how fragile the system is.”
“Existential flash point”
The Afghan banking sector is also warning of a complete collapse.
“Afghanistan and its banking sector are at an ‘existential flashpoint’ where the collapse of the banking sector is at hand,” reads an August 23 memo from the Afghan-American Chamber of Commerce. . The memo was written by a banking and finance task force made up of major Afghan commercial banks, clients and investors.
Afghanistan’s central bank, the foundation of its financial system, appears to be in disarray.
Many current Afghan central bank employees have not been allowed to return to the office since the Taliban took power, the Afghan central bank source told CNN.
“My colleagues are worried about their unclear fate,” the source said.
The Afghan-American Chamber of Commerce memo said that at least since August 23, central bank management “refused to respond to any communication” from the banking industry. The central bank’s liquidity demands were not honored, the note said.
The Afghan banking group said it had decided to shut down all banks across the country on Aug. 15 and had not reopened due to fears of a “flight” from customers for deposits.
Little is known about the new central bank chief. He appears to be a loyalist without the kind of curriculum vitae or training that would inspire confidence in the Afghan banking system.
Part of the problem is that Taliban-ruled Afghanistan has become an outcast almost overnight.
The Biden administration quickly blocked the Taliban from accessing the billions of dollars held by the United States central bank.
Lack of liquidity is a nightmare for a country with a very large trade deficit like Afghanistan.
Citing a “rapid depletion of liquidity,” the Afghan banking group called on the US government to immediately grant access to central bank assets.
“Without access soon, we fear that the entire Afghan economy and banking sector will fail and the liquidation of assets will be ordered,” the note said, “and that public frustration and possible violence will ensue. soon as the public [will] unable to buy food and important services. “
Growing risk of humanitarian disaster
All of this will be an immediate test of governance for the Taliban – and could create an opening for ISIS and other groups seeking to further destabilize the region.
“The Taliban arrived without realizing what they would inherit here,” an economic source close to Afghanistan told CNN.
Today, there is growing concern that the situation in Afghanistan will soon degenerate into a humanitarian catastrophe.
“Humanitarian aid must not only stay, but must increase over the next few days and months,” he said. “Let’s not wait for another crisis to strike.”
Consider that nearly half – 47% – of Afghan households lived in poverty, according to the World Bank.
“Very quickly, things are going very badly,” the economic source close to Afghanistan told CNN, adding that a humanitarian crisis is “inevitable” in the current path.
The Afghan central bank employee expressed concern about the future.
“I have many wishes – they are all going to die,” the employee said. “We are heading towards a hopeless future.”