A Humanitarian Emergency: The Collapse of Afghanistan's Banking System
Afghanistan’s Central Bank plays a critical role in the economy by managing inflation, controlling exchange rates, and printing money. After the Taliban took over Afghanistan, the United States blocked access to $9.5 billion in reserves in the Afghan Central Bank which has led to a crisis of liquidity, paralyzing banks and the private sector. With the suspension of billions in IMF, World Bank, and bilateral assistance, government support and salaries for hundreds of thousands of security and civil service employees have abruptly ended, further devastating the fragile economy.
Now, there is a severe shortage in cash, rampant inflation, and currency depreciation in all corners of the country. Afghan citizens, businesses, and humanitarian organizations are all struggling to withdraw cash. This has led to a severe food and medical crisis, in which 8 million Afghans are on the brink of famine and hospitals cannot afford staff salaries or medical supplies. This conversation will assess what needs to be done to prevent the collapse of Afghanistan’s financial system and alleviate one of the world’s greatest humanitarian emergencies.
This event is made possible through general support to CSIS.