The United States has no plans to release billions in Afghan assets, the Treasury Department said

WASHINGTON, September 3 (Reuters) – The Biden administration has no plans to release billions in Afghan gold, investment and foreign exchange reserves parked in the United States, as it froze after the Taliban seized power, despite pressure from humanitarian groups and others saying , that the costs may be the collapse of Afghanistan’s economy.

A large part of the Afghan Central Bank’s assets of $ 10 billion are parked abroad, where they are seen as a key instrument for the West to pressure the Taliban to respect women’s rights and the rule of law.

Any release of these assets could be months away, financial experts said.

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Officials from the US State Department, the US Treasury Department, the White House National Security Council and other agencies have been in regular discussions about Afghanistan’s finances since the Taliban took over in mid-August, ahead of what the UN and others see as a looming humanitarian crisis.

Any decision to release the funds is likely to involve top U.S. officials from several departments, but will ultimately be up to President Joe Biden, experts said.

Food and fuel prices are rising throughout Afghanistan, amid a shortage of cash triggered by a halt in foreign aid, a halt in dollar shipments and a drought. Read more

The U.S. Treasury Department said this week that it had issued a license authorizing the U.S. government and its partners to continue facilitating humanitarian aid in Afghanistan. It also gave Western Union (WU.N), the world’s largest money transfer company, and other financial institutions the green light to resume processing personal money transfers to Afghanistan from migrants abroad.

The Treasury Department will not ease sanctions against the Taliban or lift restrictions on their access to the global financial system, a spokesman for Reuters said.

“The U.S. government has been in contact with humanitarian partners in Afghanistan, both in terms of security conditions on the ground and about their ability to continue their humanitarian work,” the spokesman said.

“As we maintain our commitment to the Afghan people, we have not reduced the sanctions pressure on Taliban leaders or the significant restrictions on their access to the international financial system.”

Shah Mehrabi, an economics professor in Maryland and a longtime member of the Afghan central bank’s board, a senior Russian official and humanitarian groups are among those calling on the US Treasury Department to also release Afghan assets and say life is at stake.

“The seriousness of the situation is so enormous. Every day that passes will result in more suffering and more emigration of people,” Mehrabi said.

The International Monetary Fund has also blocked the Taliban from accessing about $ 440 million in new emergency reserves, or special drawing rights, issued by the global lender last month.

The Bank for International Settlements, which experts say also holds about $ 700 million of Afghanistan’s reserves, declined to comment, saying it was its policy not to “recognize or discuss banking relations.”

Adnan Mazarei, former deputy director of the IMF and now a fellow at the Peterson Institute for International Economics, said the IMF could not act until its board voted once Afghanistan had an internationally recognized government.

He said central banks typically do not touch their SDR reserves except as a last resort. Even Iran, which is struggling under intense international sanctions, has not used its IMF emergency reserves, he said.

Brian O’Toole, a former Treasury official who is now attached to the Atlantic Council, said a release of Afghan assets would not solve Afghanistan’s significant problems.

“Just releasing these funds is not stabilizing the Afghan economy or doing anything like that. What it is doing is giving the Taliban access” to billions of dollars, “he said. “I do not think there will be much appetite in the United States to do so, and neither should there.”

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Reporting by Andrea Shalal and Daphne Psaledakis; further reporting by David Lawder; Edited by Heather Timmons and Grant McCool

Our standards: Thomson Reuters Trust Principles.

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