The United States has no intention of releasing billions of dollars of worth assets belonging to Afghanistan central bank that were frozen once the Taliban took control of the country, despite increasing calls from humanitarian groups and other actors warning the country is facing an imminent economic collapse.
Much of the Afghan central bank's $10 billion in assets are parked overseas, where they are considered a key instrument for the West to pressure the Taliban to respect women's rights and the rule of law.
Any unfreezing of these assets may be months away, financial experts said.
Officials from the U.S. State Department, U.S. Treasury, White House National Security Council and other agencies have been in regular discussions about Afghanistan's finances since the Taliban took over in mid-August, ahead of what the United Nations and others see as a looming humanitarian crisis.
Any decision to release the funds would likely involve top U.S. officials from several departments but will ultimately be up to President Joe Biden, the experts said.
Food and fuel prices are soaring across Afghanistan, amid a shortage of cash triggered by a halt in foreign aid, a halt in dollar shipments and a drought.
The U.S. Treasury this week said it had granted a license authorizing the U.S. government and its partners to continue to facilitate humanitarian aid in Afghanistan. It also gave Western Union, the world's largest money transfer firm, and other financial institutions a green light to resume personal remittances to Afghanistan from migrants overseas.
The Treasury Department is not easing sanctions on the Taliban or loosening restrictions on their access to the global financial system, a spokesperson told Reuters.
"The United States government has been in touch with humanitarian partners in Afghanistan, both regarding security conditions on the ground and about their ability to continue their humanitarian work," the spokesperson said.
"As we maintain our commitment to the Afghan people, we have not reduced sanctions pressure on Taliban leaders or the significant restrictions on their access to the international financial system."
Shah Mehrabi, an economics professor in Maryland and longtime member of the Afghan central bank's board, a senior Russian official and humanitarian groups are among those urging the U.S. Treasury to unfreeze the Afghan assets, saying that lives are at stake.
"The gravity of the situation is so immense. Every day that passes is going to result in more suffering and more exodus of people," Mehrabi said.
The International Monetary Fund (IMF) has also blocked the Taliban from accessing some $440 million in new emergency reserves, or Special Drawing Rights, issued by the global lender last month.
Adnan Mazarei, former deputy director of the IMF and now a fellow at the Peterson Institute for International Economics, said the U.S. could not legally release the Afghan assets until there was an internationally recognized government, and that could take many months to occur. The IMF could not act until its board voted, once a government was recognized.
He said a central bank's reserves are typically not touched except as a last resort. Even Iran, struggling under intense international sanctions, has not used its IMF emergency reserves, he said.
Brian O'Toole, a former Treasury Department official now with the Atlantic Council, said a release of the Afghan assets would not solve Afghanistan's considerable problems.
"Just releasing those funds doesn't stabilize the Afghan economy, or do anything like that. What it does is give the Taliban access (to billions of dollars)," he said. "I don't think there's going to be a lot of appetite in the U.S. to do that, nor should there be."
