Afghan Central Bank Drained Dollar Stockpile before Kabul Fell, Says Document

Afghans line up outside a bank to take out their money after Taliban takeover in Kabul, Afghanistan September 1, 2021. (Reuters)
Afghans line up outside a bank to take out their money after Taliban takeover in Kabul, Afghanistan September 1, 2021. (Reuters)
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Afghan Central Bank Drained Dollar Stockpile before Kabul Fell, Says Document

Afghans line up outside a bank to take out their money after Taliban takeover in Kabul, Afghanistan September 1, 2021. (Reuters)
Afghans line up outside a bank to take out their money after Taliban takeover in Kabul, Afghanistan September 1, 2021. (Reuters)

The Afghan central bank ran down most of its US dollar cash reserves in the weeks before the Taliban took control of the country, according to an assessment prepared for Afghanistan’s international donors, exacerbating the current economic crisis.

The confidential, two-page brief, written in early September by senior international economic officials, said the country’s severe cash shortage began before the Taliban took control of Kabul.

It was written for the use of donors and lenders, including the World Bank and International Monetary Fund.

It criticized how the central bank’s former leadership handled the crisis in the months before the Taliban’s conquest, including decisions to auction unusually large amounts of US dollars and move money from Kabul to provincial branches.

“FX (foreign exchange) reserves in CB’s (central bank) vaults in Kabul have depleted, the CB cannot meet ... cash requests,” the report, seen by Reuters, said.

“The biggest source of the problem is the mismanagement at the central bank prior to the Taliban takeover,” it added.

Shah Mehrabi, chairman of the central bank’s audit committee who helped oversee the bank before the Taliban took over and is still in his post, defended the central bank’s actions, saying it was trying to prevent a run on the local Afghani currency.

The extent of the cash shortage can be seen on the streets of Afghan cities, where people have been queuing for hours to withdraw dollar savings amid strict limits on how much they can take out.

Even before the shock of the Western-backed government’s collapse, the economy was struggling, but the return of the Taliban and abrupt end of billions of dollars in foreign aid has left it in deep crisis.

Prices for staples like flour have spiraled while work has dried up, leaving millions facing hunger as winter approaches.

Aid dries up
Under the previous government, the central bank relied on cash shipments of $249 million, delivered roughly every three months in boxes of bound $100 notes and stored in the vaults of the central bank and presidential palace, according to three people with direct knowledge of the matter.

That money has dried up as foreign powers shy away from dealing directly with the Taliban, which fought against foreign troops and the ousted government. Thousands of people - many of them civilians - died.

The central bank, which plays a key role in Afghanistan because it distributes aid from countries like the United States, said on Wednesday it had finalized a plan to meet the country’s foreign currency needs. It gave no details.

The hard currency crunch is making it difficult for the Taliban to meet basic needs, including paying for power or dispersing salaries to government employees, many of whom have not been paid in months.

Afghanistan’s roughly $9 billion of offshore reserves were frozen as soon as the Taliban captured Kabul, leaving the central bank with just the cash in its vaults.

According to the report, the central bank auctioned off $1.5 billion between June 1 and Aug. 15 to local foreign exchange dealers, which it said was “strikingly high”.

“By August 15, the Central Bank had an outstanding liability of $700 million and 50 billion Afghanis ($569 million) towards the commercial banks,” it said, adding that this had been a major factor in emptying its coffers.

Afghan central bank official Mehrabi said, however, that although almost $1.5 billion of auctions had been announced, the actual amount sold was $714 million.

He said the central bank had “continued its foreign exchange auction to reduce the depreciation and inflation.”

Money missing?
The report also questioned a decision by the central bank to shift some of its reserves to provincial branches, putting it at risk as Taliban militants made advances across the country from late 2020 in the runup to their victory.

It said around $202 million was kept in these branches at the end of 2020, compared with $12.9 million in 2019, and that the cash was not moved as provinces started to fall to the insurgents.

“Some money is reportedly lost (stolen) from ‘some’ of the provincial branches,” the report said, without specifying how much.

Mehrabi said the central bank was investigating money “stolen” from three of its branches, although not by the Taliban. He gave no further details.

Former central bank governor Ajmal Ahmady, who left the country the day after Kabul fell, did not respond to emails and other messages requesting comment on his and the bank’s actions in the months before the Taliban returned to power.

Ahmady has said on Twitter in recent weeks that he did his best to manage the situation, and blamed any cash shortfall on the freezing of central bank assets abroad.

In his statements, he also said the central bank had managed the economy well prior to the fall of Kabul and that he felt bad about leaving staff behind but feared for his safety. He has said no money was stolen from any reserve account.



Congress Approves Trump's $9 billion Cut to Public Broadcasting, Foreign Aid

Speaker of the House Mike Johnson, R-La., leaves the chamber at the Capitol in Washington, Thursday, July 17, 2025. (AP Photo/J. Scott Applewhite)
Speaker of the House Mike Johnson, R-La., leaves the chamber at the Capitol in Washington, Thursday, July 17, 2025. (AP Photo/J. Scott Applewhite)
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Congress Approves Trump's $9 billion Cut to Public Broadcasting, Foreign Aid

Speaker of the House Mike Johnson, R-La., leaves the chamber at the Capitol in Washington, Thursday, July 17, 2025. (AP Photo/J. Scott Applewhite)
Speaker of the House Mike Johnson, R-La., leaves the chamber at the Capitol in Washington, Thursday, July 17, 2025. (AP Photo/J. Scott Applewhite)

The House gave final approval to President Donald Trump's request to claw back about $9 billion for public broadcasting and foreign aid early Friday as Republicans intensified their efforts to target institutions and programs they view as bloated or out of step with their agenda.

The vote marked the first time in decades that a president has successfully submitted such a rescissions request to Congress, and the White House suggested it won't be the last. Some Republicans were uncomfortable with the cuts, yet supported them anyway, wary of crossing Trump or upsetting his agenda.

The House passed the bill by a vote of 216-213. It now goes to Trump for his signature, The AP news reported.

“We need to get back to fiscal sanity and this is an important step,” said House Speaker Mike Johnson, R-La.

Opponents voiced concerns not only about the programs targeted, but about Congress ceding its spending powers to the executive branch as investments approved on a bipartisan basis were being subsequently canceled on party-line votes. They said previous rescission efforts had at least some bipartisan buy-in and described the Republican package as unprecedented.

No Democrats supported the measure when it passed the Senate, 51-48, in the early morning hours Thursday. Final passage in the House was delayed for several hours as Republicans wrestled with their response to Democrats' push for a vote on the release of Jeffrey Epstein files.

The package cancels about $1.1 billion for the Corporation for Public Broadcasting and nearly $8 billion for a variety of foreign aid programs, many designed to help countries where drought, disease and political unrest endure.

The effort to claw back a sliver of federal spending came just weeks after Republicans also muscled through Trump’s tax and spending cut bill without any Democratic support. The Congressional Budget Office has projected that measure will increase the U.S. debt by about $3.3 trillion over the coming decade.

"No one is buying the the notion that Republicans are actually trying to improve wasteful spending,” said Democratic leader Hakeem Jeffries.

A heavy blow to the Corporation for Public Broadcasting The cancellation of $1.1 billion for the CPB represents the full amount it is due to receive during the next two budget years.

The White House says the public media system is politically biased and an unnecessary expense.

The corporation distributes more than two-thirds of the money to more than 1,500 locally operated public television and radio stations, with much of the remainder assigned to National Public Radio and the Public Broadcasting Service to support national programming.

Democrats were unsuccessful in restoring the funding in the Senate.

Lawmakers with large rural constituencies voiced particular concern about what the cuts to public broadcasting could mean for some local public stations in their state.

Sen. Lisa Murkowski, R-Alaska, said the stations are "not just your news — it is your tsunami alert, it is your landslide alert, it is your volcano alert.”

As the Senate debated the bill Tuesday, a 7.3 magnitude earthquake struck off the remote Alaska Peninsula, triggering tsunami warnings on local public broadcasting stations that advised people to get to higher ground.

Sen. Mike Rounds, R-S.D., said he secured a deal from the White House that some money administered by the Interior Department would be repurposed to subsidize Native American public radio stations in about a dozen states.

But Kate Riley, president and CEO of America’s Public Television Stations, a network of locally owned and operated stations, said that deal was “at best a short-term, half-measure that will still result in cuts and reduced service at the stations it purports to save.”

Inside the cuts to foreign aid Among the foreign aid cuts are $800 million for a program that provides emergency shelter, water and family reunification for refugees and $496 million to provide food, water and health care for countries hit by natural disasters and conflicts. There also is a $4.15 billion cut for programs that aim to boost economies and democratic institutions in developing nations.

Democrats argued that the Republican administration's animus toward foreign aid programs would hurt America's standing in the world and create a vacuum for China to fill.

“This is not an America first bill. It's a China first bill because of the void that's being created all across the world,” Jeffries said.

The White House argued that many of the cuts would incentivize other nations to step up and do more to respond to humanitarian crises and that the rescissions best served the American taxpayer.

“The money that we're clawing back in this rescissions package is the people's money. We ought not to forget that,” said Rep. Virginia Foxx, R-N.C., chair of the House Rules Committee.

After objections from several Republicans, Senate GOP leaders took out a $400 million cut to PEPFAR, a politically popular program to combat HIV/AIDS that is credited with saving millions of lives since its creation under Republican President George W. Bush.

Looking ahead to future spending fights Democrats say the bill upends a legislative process that typically requires lawmakers from both parties to work together to fund the nation’s priorities.

Triggered by the official rescissions request from the White House, the legislation only needed a simple majority vote to advance in the Senate instead of the 60 votes usually required to break a filibuster. That meant Republicans could use their 53-47 majority to pass it along party lines.

Two Republican senators, Murkowski and Sen. Susan Collins of Maine, joined with Democrats in voting against the bill, though a few other Republicans also raised concerns about the process.

“Let’s not make a habit of this,” said Senate Armed Services Committee Chairman Roger Wicker of Mississippi, who voted for the bill but said he was wary that the White House wasn’t providing enough information on what exactly will be cut.

Russ Vought, the director of the Office of Management and Budget, said the imminent successful passage of the rescissions shows “enthusiasm” for getting the nation’s fiscal situation under control.

“We’re happy to go to great lengths to get this thing done,” he said during a breakfast with reporters hosted by the Christian Science Monitor.

In response to questions about the relatively small size of the cuts -- $9 billion -- Vought said that was because “I knew it would be hard” to pass in Congress. Vought said another rescissions package is ’likely to come soon.”