The Taliban took over Afghanistan with astonishing speed, but it appears unlikely that the militants will get quick access to most of the Afghan central bank’s roughly $10 billion in assets.
The country’s central bank, Da Afghanistan Bank (DAB), is thought to hold foreign currency, gold and other treasures in its vaults, according to an Afghan official.
Most of the assets are held outside Afghanistan potentially putting most of them beyond the insurgents’ reach, according to Afghan officials, including the bank’s acting governor, Ajmal Ahmady, who fled Kabul.
“Given that the Taliban are still on international sanction lists, it is expected (confirmed?) that such assets will be frozen and not accessible to Taliban,” Ahmady said in a Twitter thread on Wednesday.
“We can say the accessible funds to the Taliban are perhaps 0.1-0.2% of Afghanistan’s total international reserves. Not much,” he added.
The Taliban said on Saturday that the treasury, public facilities and government offices were the property of the nation and “should be strictly guarded.”
The most recent financial statement posted online shows DAB holds total assets of about $10 billion, including $1.3 billion-worth of gold reserves and $362 million in foreign currency cash reserves, based on currency conversion rates on June 21, the date of the report. Ahmady estimated total reserves stood at $9 billion last week.
MANY ASSETS HELD ABROAD
Central banks, especially in developing nations, often park their assets overseas with institutions such as the Federal Reserve Bank of New York (FRBNY) or the Bank of England.
DAB’s consolidated statement showed that the FRBNY held gold bars worth 101,770,256,000 afghanis – at the time $1.32 billion – on behalf of the Afghan central bank in its vaults by end-2020.
The DAB’s June statement also states the bank owned investments worth $6.1 billion. The June report did not provide details of those investments, but a breakdown in the year-end report showed the majority were in the form of U.S. Treasury bonds and bills.
Investments were made through the International Bank for Reconstruction and Development (IBRD), an arm of the World Bank, or through the FRBNY and held in New York. Among its smaller items are shares in an investment pool by the Bank for International Settlement (BIS), which is based in Switzerland, as well as the Economic Cooperation Organisation Trade and Development Bank in Turkey.
“As per international standards, most assets are held in safe, liquid assets such as Treasuries and gold,” Ahmady said on Twitter, confirming assets were all held at the Fed, BIS, through the World Bank programme or other bank accounts.
Asked about the holdings, a FRBNY official said the bank does not acknowledge or discuss individual account holders, but is generally in contact with U.S. government agencies to monitor events that may impact control of a foreign central bank.
An official in U.S. President Joe Biden’s administration told Reuters: “Any central bank assets the Afghan government have in the United States will not be made available to the Taliban.”
DAB’s foreign currency cash holdings worth around $362 million are almost entirely U.S. dollars and were held at the bank’s head offices and branches as well as the presidential palace, which is now in the hands of the Taliban.
The DAB’s year-end statement also details that just under $160 million worth of gold bars and silver coins were held at the bank’s vault at the presidential palace.
The Afghan central bank’s vaults also contain a hoard of 2,000-year-old gold jewellery, ornaments and coins known as the Bactrian Treasure, according to UNESCO. The around 21,000 ancient artefacts were presumed lost until 2003, when they were found in a secret vault in the central bank’s basement, having survived the previous era of Taliban rule undiscovered.
Afghan lawmakers in January floated the idea of sending the treasures abroad for safe keeping, warning they were vulnerable to theft, local broadcaster Tolo News reported.