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US says no release of Afghan Central Bank reserves to Taliban without reform

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A money changer counts Afghani banknotes at an exchange market in Kandahar in December 2021 amid the sidelining of the country's central bank by global powers following the Taliban's return to power./AFP
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Sep 15, 2022 - 07:08 AM

WASHINGTON (AA) – The US maintained on Wednesday that it would not allow the Taliban to access Afghanistan’s $3.5 billion in Central Bank reserves without major reforms, even as it opened the funds for disbursement to alleviate economic strain on the war-torn country.

Washington announced earlier in the day the formation of an international financing mechanism to allow for some of Afghanistan’s debts to be paid out of Central Bank reserves that have been frozen by the US after the Taliban’s August 2021 seizure of power.

State Department spokesman Ned Price said the funds would be used to pay for “critical inputs,” pointing in particular to electricity payments and other debts that if left unpaid “would plunge Afghanistan into even greater levels of macroeconomic instability.”

“That would not benefit the people of Afghanistan. But ultimately, we’re doing what is in the best interest of the people of Afghanistan, putting in place the safeguards to see to it, and the auditing structures to see to it, that these funds are used as they were intended,” he said.

The US will not allow the Taliban to access the reserves until such a time as major reforms previously outlined by the Biden administration, including demonstrating the Central Bank’s independence from any Afghan government, instituting anti-money laundering measures, and efforts to thwart the financing of terrorism.

“Those steps have not taken place yet. We’ve made very clear to the Taliban that those are the kinds of steps that would need to occur before we could consider recapitalization,” said Price.

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