With the quick and sudden takeover of the Taliban in Afghanistan, observers are looking at what the movement (which is classified as a terrorist banned in Russia) will do with the country’s wealth, especially money that can be accessed and utilized quickly other than production resources.
The Central Bank of Afghanistan has assets estimated at about $10 billion, which is many times its estimated annual income of about 700 million.
The country’s central bank, the Bank of Afghanistan, is believed to keep foreign currency, gold and other assets in its vaults. This means that most assets are held outside the country, leaving most of them out of the insurgents’ reach, according to Afghan officials, including the bank’s acting governor, Ajmal Ahmadi, who fled from Kabul.
Ahmadi said in a tweet: “Given that the Taliban is still on the international sanctions lists, it is expected (confirmation) that these assets will be frozen and will not be accessed by the Taliban. We can say that the funds that the Taliban have access to may be 0.1% – 0.2% of the total Afghanistan’s international reserves. Not much.”
On Saturday, the Taliban said the treasury, public utilities and government offices belonged to the nation and “must be closely guarded”.
In the latest online financial statement, the Central Bank states that it has total assets of more than $10 billion, including $1.3 billion in gold reserves and $362 million in foreign currencies. Al Ahmadi estimates total reserves at about $9 billion.
Central banks, especially in developing countries, often deposit their assets abroad with institutions such as the Federal Reserve Bank of New York or the Bank of England. Official data shows that the New York Fed held $1.32 billion in gold bullion, on behalf of the Central Bank of Afghanistan, in its vaults by the end of 2020.
The Bank of Afghanistan statement issued in June also stated that the bank had investments worth $6.1 billion, but did not provide details of those investments, but the year-end report showed that the majority were in the form of US bonds and treasury bills.
A New York Fed official said the bank is in general contact with US government agencies to monitor events that might affect a foreign central bank. An official in the administration of US President Joe Biden said: “Any central bank assets owned by the Afghan government in the United States of America will not be made available to the Taliban.”
On the other hand, the Bank of Afghanistan’s foreign currency holdings amount to $362 million, and this money is kept in the main offices of the bank and its branches in addition to the presidential palace, which is now in the hands of the Taliban. The bank also keeps about $160 million in gold bars and silver coins in the bank’s vault at the Presidential Palace.
The vaults of the Central Bank of Afghanistan also contain a 2,000-year-old hoard of gold jewellery, ornaments and coins known as the “Bactrian Treasure,” according to UNESCO.
Some 21,000 ancient artifacts are presumed missing until 2003, when they were found in a secret vault in the Central Bank, having survived the previous era of Taliban rule.