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Shah Mehrabi said that the United States and the International Monetary Fund should provide the Taliban with limited monetary channels to prevent economic collapse.
A senior board member of the Central Bank of Afghanistan urged the US Treasury Department and the International Monetary Fund to take measures to provide the Taliban-led government with limited national reserves to avoid economic disaster.
The Taliban took over Afghanistan at an alarming rate, but it seems unlikely that the organization will quickly obtain most of the approximately US$10 billion in assets held by the Afghan Bank (DAB), most of which are outside Afghanistan.
The administration of US President Joe Biden stated that any central bank assets owned by the Afghan government in the United States will not be provided to the Taliban, and the International Monetary Fund stated that the country will not be able to obtain lenders’ resources.
Shah Mehrabi, a professor of economics at Montgomery College in Maryland and a member of the bank’s board of directors since 2002, said in a telephone interview with Reuters on Wednesday that if Afghanistan’s international reserves remain frozen, it will face “inevitable economic and Humanitarian crisis”.
Mehrabi emphasized that he does not speak on behalf of the Taliban, but promotes the process as a current board member. He said he plans to meet with U.S. lawmakers this week and hopes to talk to U.S. Treasury officials as soon as possible.
“If the international community wants to prevent economic collapse, one way is to allow Afghanistan to obtain limited and monitored reserves,” he said.
“The inability to enter will stifle the Afghan economy and directly harm the Afghan people and further impoverish the family.”
Mehrabi proposed that Washington allow the new government in Kabul to conduct limited monthly visits, which may initially be between US$100 million and US$125 million, which will be supervised by independent auditors.
“The Biden administration should negotiate with the Taliban on funding, just as they negotiate on the evacuation issue,” he said.
He said that if assets are completely frozen, then inflation will continue to soar, Afghans will not be able to afford basic necessities, and the central bank will lose the main tool to implement monetary policy.
Mehrabi added that the Taliban can survive on tariffs, increase opium production, or sell captured US military equipment, but if the country cannot obtain currency, it will suffer daily and rely entirely on international aid.
He said that after nearly 20 years of US intervention, the Afghan economy has become heavily dollarized and relies on imports, which must be purchased in foreign currencies.
Mehrabi said that because overseas reserves are not restricted, the Afghan bank may be destroyed after it has cultivated an apolitical technocratic institution that has so far been allowed to continue its work under the leadership of the Taliban.
“Their work there does not depend on who is in power,” he said, noting that he did not personally contact Taliban representatives, but now keeps in touch with colleagues who do business there every day.
Ajmal Ahmady, who led the Central Bank before the occupation of Kabul, stated that approximately $7 billion of DAB’s assets are deposited with the Federal Reserve in the form of cash, gold, bonds and other investments.
He said that most of the rest is in other international accounts and the Bank for International Settlements (a central bank bank headquartered in Switzerland), rather than actually stored in DAB’s vaults-only about 0.2% or less of funds are left. For use by the Taliban.
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