Afghan economists and money exchangers warned of an imminent shortage of available currency in Afghanistan as the country is struggling with a severe economic crisis following the fall of the Western-backed government of President Ashraf Ghani.
Also, on Monday UNDP released a report saying that without some help to prevent the crisis, the economy will go into a freefall.
The UNDP report said that with current trends and withdrawal restrictions, about 40% of Afghanistan's deposit base will be lost by the end of the year. It said banks have stopped extending new credit, and that non-performing loans had almost doubled to 57% in September from the end of 2020.
"If this rate continues of non-performing loans, the banks may not have a chance to survive in the next six months. And I am being optimistic," said Abdallah al Dardari, head of UNDP in Afghanistan.
The UNDP report and Afghan economists who spoke to TOLOnews said the suspension of aid and the freezing of Afghan assets are the main reasons for the cash crisis.
“The demands on the government are growing. The government sought to free $350 million dollars from the US but the US denied it. This means that the government lacked $350 million dollars it needed. I think when the Taliban came to power they faced an empty treasury,” said Sayed Masoud, an economist.
In early October, Reuters cited a confidential assessment prepared by analysts for Afghanistan's international donors. The report questioned a decision by the central bank to shift some of its reserves to provincial branches. "It (the report) 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..."
The report said: "some money is reportedly lost (stolen) from 'some' of the provincial branches," the report said, without specifying how much.
When the Islamic Emirate came to power, the US Department of Treasury froze the international bank assets of Afghanistan, which was around $9 billion.