The International Monetary Fund said Wednesday that Afghanistan would not be able to access IMF funds, citing a “lack of clarity” over the recognition of the country’s government after the Taliban take over.
The statement came after a report from Politico said the US Treasury Department was taking steps to get the IMF to block funds for Afghanistan. The IMF was scheduled to deliver money from a “special drawing rights” fund to Afghanistan next week worth about $450 million.
The Biden administration has also reportedly frozen billions in Afghan government reserves. The Washington Post reported that Treasury Secretary Janet Yellen ordered for the funds to be frozen on Sunday.
According to the IMF, the Afghan government had $9.4 billion in reserve assets as of April. Although exact numbers aren’t clear, billions of government reserves are held in US banks. The report said the “vast majority” of the reserves are not held in Afghanistan. Since the Taliban are already under US sanctions, the Biden administration didn’t need any new authority to seize the money.
As the Taliban is working to form a new government, it is unclear how the US will approach them. The US has a long history of using economic warfare like blockades and sanctions against governments it done not like. Such methods never change the government and only hurt the civilian population of the target countries.