UN unable to use its $135m in AIB

KABUL (Pajhwok): The United Nations could not utilize $135 million it has deposited in the Afghanistan International Bank (AIB) as the money could not be converted into the local currency (afghani), an official said.

Abdullah Al Dardari, head of the UN Development Program in Afghanistan, said the UN had taken US dollars into the country and deposited with the AIB with clear promise from Taliban-run Central Bank that fresh cash will be automatically converted to Afghanis.

“This did not happen,” he told the ACAMS Global Sanctions Space Summit, adding that UNDP itself has “$30 million stuck at AIB that I cannot convert to Afghanis and without Afghanis as you can imagine, we cannot implement all our programs.”

The Islamic Emirate of Afghanistan has been under international sanctions that are hindering the UN from implementing humanitarian operations in the war-ravaged country as 39 million Afghan population suffer from extreme hunger and educational, economic, and social services face collapse.

It comes a day after the US Department of Treasury lifted a number of financial sanctions on Afghanistan and allowed international banks to transfer money into Afghanistan and send money to Afghan teachers and health sectors.

Billions of dollars in Afghan central bank reserves and foreign development aid have been frozen to prevent it from falling into Taliban hands. International banks are wary of breaching sanctions, leaving the United Nations and aid groups struggling to get enough money into the country.

Liquidity is also a problem. Al Dardari told Reuters in November that while there was about $4 billion worth of afghanis in the economy, only about $500 million worth was in circulation.

The United Nations and the World Bank are discussing a possible swap facility, aid groups and UN officials have said.

Al Dardari said on Thursday that this would allow cash for humanitarian operations to be paid into a mechanism abroad and then afghanis could be collected “from major traders and mobile companies from inside Afghanistan.”

He also said lessons could be learned from a program in Myanmar, where electronic payment systems bypassed the central bank.

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