JURIST EXCLUSIVE – Law students and lawyers in Afghanistan are filing reports with JURIST on the situation there after the fall of Kabul to the Taliban. Here, a lawyer in Kabul offers his personal observations and perspective on recent banking and financial developments in Afghanistan. For privacy and security reasons we are withholding our correspondent’s name and institutional affiliation. The text has been only lightly edited to respect the author’s voice.
Today, I visited a local bank to receive my USD 200 which I can receive from my account on a weekly basis. I went to the nearest branch of this bank but I was told that they do not have USD dollars. I went to the main branch of the bank which is close to the central bank.
I received the above amount but the dollar I received today is from 2006 series. Currently, one USD is exchanged to 90 AFN. However, the 2006 series of dollars is not exchanged for the same price. It is almost 85 AFN.
When I was at the central bank, I remember that the central bank has sent an official letter to commercial banks and money services providers to collect the banknotes which are too old and they should not distribute it in the market. All of those banknotes were collected by the central bank. Now, it seems that the central bank is out of US dollar banknotes and distributed the old banknotes.
I also took some time and talked to the guy at the bank on how much they receive on a weekly basis from the central bank. He told me that this week they only received USD 20,000 from the central bank. This means that the central bank as well as commercial banks are running out of dollar banknotes and soon this will adversely affect the banking system.
My friend further added that the state-owned banks as well as the commercial banks are only open provide cash to the people and nothing more than that. Moreover, according to this friend Pashanty Bank, Bank Millie, Maiwand Bank, Afghan United Bank, and Ghazanfar Bank are the banks which will close their operations in their branches in Kabul. He cannot confirm when this will actually happen but considering that these banks are paying their customer’s money on daily basis and lack of US banknotes will definitely force them to close their branches and only operate in their main office.
The central bank recently announced that it has communicated with the World Bank and the IMF to discuss TTs and the country’s money which is now frozen. However, it does not seem that any of these entities will take any measures allowing the Taliban to receive any US banknotes.