Afghanistan's financial system's on verge of collapse

Source : 112 Ukraine

The country's banking system has faced a crisis due to customer panic
17:16, 29 September 2021

Head office of the Islamic Bank of Afghanistan in Kabul

Afghanistan's financial system is in danger of collapsing. Chief Executive of the Islamic Bank of Afghanistan Syed Moosa Kaleem Al-Falahi reported that as quoted by the BBC.

According to him, the banking system has faced a crisis due to customer panic; now there is a mass withdrawal of funds, and most banks do not work and do not provide full range of services. In addition, Afghanistan's economy was already on the brink of a system crisis before the Taliban seized power there.

Related: Women not allowed to enter Kabul University

Afghanistan's economy is heavily dependent on foreign aid; according to the World Bank, about 40% of its gross domestic product (GDP) is international aid. But after the Taliban seized power, the West froze international funds, including assets that Afghanistan could access through the World Bank and the International Monetary Fund (IMF).

The country also has rising inflation and a sharp fall in the local currency (afghani). Many have lost their jobs and suffer from shortage of cash. Only 5% of families in the country have enough food for every day.

For its part, the United States has said it is ready to consider cooperating with the Taliban, but this will depend on some preconditions, including the current regime's treatment of women and minorities. Under these circumstances, the Taliban is looking for other sources of financial support.

Related: A nervy trip to Kabul: How Ukraine negotiated with the Taliban and rescued 96 Afghans

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