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Afghanistan’s financial system on brink of collapse
The UN has warned that Afghanistan’s financial system could collapse within months
The United Nations says bank deposits are evaporating, and new lending with Afghanistan has dried up.
They note there has been a spike in people unable to repay current loans – and together with lower deposits and a cash liquidity crunch, it could cause the financial system to collapse within months.
Most foreign development support came to an abrupt end when the Taliban seized power in August.
This sent the nation’s economy into a free-fall, which is putting a severe strain on the banking system.
It recently put weekly withdrawal limits on Afghan citizens to stop a run on deposits.
The UN’s Development Program warns that if the nation’s banking system fails, it could take decades to rebuild.
The regime’s Acting Information Minister says it is trying to get access to assets that are frozen by the United States.
Finding a way to avert a collapse is complicated by international and unilateral sanctions on Taliban leaders.
The United States is working with the United Nations, UNDP and other international institutions and countries “to find ways to offer liquidity, to infuse, to see to it that the people of Afghanistan can take advantage of international support in ways that don’t flow into the coffers of the Taliban,” said State Department spokesman Ned Price.