US clampdown on Taliban, cuts off access to billions of dollars in Afghan cash reserves

August 19, 2021

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The Biden administration on Sunday froze Afghan government cash reserves held in U.S. bank accounts, blocking the Taliban from accessing billions of dollars held in U.S. institutions, according to two people familiar with the matter.

The decision was made by Treasury Secretary Janet L. Yellen and officials in the Treasury Department’s Office of Foreign Assets Control, the people said. The State Department was also involved in discussions over the weekend, with officials in the White House monitoring the developments.

The Afghanistan central bank held $9.4 billion in reserve assets as of April, according to the International Monetary Fund. That amounts to roughly one-third of the country’s annual economic output. The vast majority of those reserves are not currently held in Afghanistan, one of the people familiar with the matter said. Among those, billions of dollars are kept in the United States, although the precise amount is unclear.

An administration official said in a statement, “Any Central Bank assets the Afghan government have in the United States will not be made available to the Taliban.” The officials spoke on the condition of anonymity to discuss government policy not yet made public.

Cutting off access to U.S.-based reserves represents among the first in what are expected to be several crucial decisions facing the Biden administration about the economic fate of that nation following the Taliban takeover.