Bank ban for the Taliban

After seizing power in Afghanistan, the nation’s new rulers find themselves in a tight spot.

The Financial Times reported that Taliban members attempted last week to access Afghanistan’s nearly USD10 billion in foreign reserves, only to find almost all of it was stuck in the Federal Reserve Bank of New York. The Biden administration has exercised its legal authority to freeze assets ‘that were held by a government when that government is replaced by a nongovernment’, leaving the Taliban penniless.

Another $1.3 billion of the Afghan central bank’s reserves are held in international accounts, while the rest is held by the Bank for International Settlements in Switzerland. While they might be celebrating their recent victory, the Taliban have been left strapped for cash. Experts decree that the group will quickly realize they lack the expertise needed to properly govern the nation.

The total funds that the Taliban have access to are estimated to be a mere 0.1-0.2% of Afghanistan’s total international reserves. This grants Western countries ‘huge leverage’ to exact demands from the extremist group, including humanitarian and political efforts, said UK Prime Minister Boris Johnson.