Stuck In The Bank, UN Funds Worth US$135 Million In Afghanistan Can't Be Used

JAKARTA - The United Nations has about US$135 million or the equivalent of IDR 1,942,184,250,000 in banks in Afghanistan, but cannot use it because the Taliban-run central bank cannot convert it into Afghan currency, a senior UN official said.

Abdallah al Dardari, Head of the United Nations Development Program (UNDP) in Afghanistan, said UN funds were deposited in the International Bank of Afghanistan with a clear promise from the central bank that the fresh funds would be automatically converted into Afghan currency.

"It (the conversion) didn't happen", he told the ACAMS Global Sanctions Space Summit.

He added that UNDP alone has "30 million US dollars stuck in the AIB which cannot be converted into Afghan currency and without it as you can imagine, we cannot implement all of our programs."

The Taliban, who seized power in August, has banned the use of foreign currency in a country where the US dollar is common.

The Taliban group has long been under international sanctions, which the United Nations and aid groups say are now blocking humanitarian operations in Afghanistan, where more than half of the country's population of 39 million people suffer from extreme hunger, with the poor economy, education, and social services. face destruction.

Billions of dollars in Afghan central bank reserves and foreign development aid have been frozen to prevent it from falling into the hands of the Taliban. International banks are wary of sanctions breaches, leaving the United Nations and aid groups struggling to get enough money into the country.

Liquidity is also a problem. Al Dardari told Reuters in November that there were funds in Afghani currency equivalent to US$4 billion, but only US$500 million in circulation.

Meanwhile, the United Nations and the World Bank are discussing possible exchange facilities, aid groups and UN officials said.

Al Dardari said on Thursday this would allow cash for humanitarian operations to be paid into mechanisms abroad and then Afghanis could be collected "from wholesalers and mobile companies from within Afghanistan."

He also said lessons could be learned from a program in Myanmar, where electronic payment systems do not bypass the central bank. Myanmar's military has been hit by a series of sanctions by the United States and others since last year's coup.