[ Reuters ] Taliban launch charm offensive with Afghan banks amid funding fears
The new, Taliban-appointed head of Afghanistan’s central bank has sought to reassure banks the group wants a fully-functioning financial system, but has so far provided little detail on how it will supply funds to sustain it, said four bankers familiar with the matter.
The acting central bank governor, Haji Mohammad Idris, met members of the Afghanistan Banks Association and other bankers this week, and told them that the Taliban viewed the banking sector as imperative, said two bankers who attended the meeting.
Uncertainty over the Taliban’s relationship with the international community is raising doubts over its ability to revive an economy shattered by 40 years of war and reliant on aid and foreign currency reserves, the latter largely out of reach in the United States.
The militant group which now controls the country was working to find solutions for liquidity and rising inflation, the bankers quoted Idris as saying.
He and his team did not tell the bankers how much cash Da Afghanistan Bank (DAB), the central bank, had access to, nor did they give any indication about how the Taliban would approach its relationship with the United States, one of the bankers said.
The central bank provided liquidity to banks in recent days, said two of the bankers, with one adding that DAB paid a portion of the amount each bank requested.
“They invited banks to send requests they may have via official letter,” said one of the bankers.
It appears unlikely that the militants will get quick access to most of the roughly $10 billion in assets held by DAB, which are mostly outside of the country. read more
“Around 80% of transactions done by banks are in dollars, so it’s very critical the new government should make the relationship with the U.S,” said the banker.
A key priority for the central bank was now to have its international accounts “unblocked” and get access to its reserves, to allow it to keep enough money circulating.
Banks have mainly re-opened this week, but are operating with limited services, including $200 weekly limits on withdrawals and few wire transfers amid liquidity worries and correspondent banks cutting ties, say bankers.
Idris also offered reassurances about banks’ female staff, telling them that the Taliban was not planning to stipulate whether they could employ women or not, said one of the bankers.
Women account for around 20% of staff in some banks, but some have stayed away from offices amid concerns the movement will repeat the stance of their previous government before 2001 when women were not allowed to work.
As a result of the assurances, some banks were inviting their female staff back to the office, the banker said.