US’ Decision to Freeze Afghanistan’s Assets Will Lead to Inflation, Hurt Poor, Central Bank Warns

World

The Asian Development Bank (ADB) reported in 2020 that 47.3 percent of Afghanistan’s 39 million people lived below the national poverty line, with more than 30 percent of the employed population having purchasing power parity (PPP) of less than $1.90 a day.

The US Treasury’s decision to freeze nearly $10 billion of Da Afghan Bank’s (DAB) assets could lead to inflation and rising food prices in Afghanistan as dollars become scarce, an advisor to former Afghanistan President Ashraf Ghani warned on Wednesday.

​Ajmal Ahmady, the governor of DAB (Afghanistan’s central bank), explained in a series of tweets that Afghanistan relied on regular shipments of dollars to keep its economy afloat by ensuring steady currency circulation. The central banker revealed that the dollar shipment scheduled for Saturday, 14 August, when Ghani was still in Kabul, didn’t arrive, before the US decided to freeze the country’s assets altogether, fearing that the Taliban* might access the funds.

Ahmady reckons that the US halted its dollar shipment to Kabul as it probably foresaw the Taliban taking over the Afghan capital the next day – 15 August. He noted that Ghani had telephoned US Secretary of State Antony Blinken days before and requested that Washington honour its commitment to transport the funds to Kabul, to which the top American diplomat agreed.

Bloomberg reported on Tuesday that the US Treasury Department had frozen the nearly $10 billion in liquid and…

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