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Central bank governor says international reserves have not been compromised

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(Last Updated On: August 18, 2021)

Ajmal Ahmady, Afghanistan’s central bank governor and former minister of industry and commerce, posted a series of tweets on Wednesday stating he wanted to “clarify the location of DAB (Central Bank of Afghanistan) international reserves.” 

He said that DAB reserves were approximately $9.0 billion as of last week but that “this does not mean that DAB held $9.0 billion physically in our vault.”

He said as per international standards, most assets are held in safe, liquid assets such as Treasuries and gold.

He said that DAB was set to receive approximately $340 million on August 23rd from the International Monetary Fund.

“Not sure if that allocation will now proceed with respect to Afghanistan,” he said. 

Given Afghanistan’s large current account deficit, DAB was reliant on obtaining physical shipments of cash every few weeks, he said.

“The amount of such cash remaining is close to zero due to a stoppage of shipments as the security situation deteriorated, especially during the last few days,” he said. 

“On Friday morning, I received a call notifying me that there would be no further USD (US Dollar) shipments,” Ahmady said, adding they were expecting one on Sunday, the day the Taliban took control of Kabul, but that this shipment did not arrive. 

Ahmady said that on Saturday, banks placed very large USD bids as customer withdrawals accelerated.

“For the first time, I therefore had to limit USD access to both banks and dollar auctions to conserve remaining DAB dollars.

“We also put out a circular placing maximum withdrawal limits per customer,” he said. 

He assured Afghans that in no way were Afghanistan’s international reserves ever compromised.

“We had a program with both the IMF and Treasury that monitored assets. No money was stolen from any reserve account,” he said.

However, he stated that given that the Taliban are still on international sanction lists, it is expected that such assets will be frozen and not accessible to Taliban.

“I believe local banks have told customers that they cannot return their dollars – because DAB has not supplied banks with dollars.

“This is true. Not because funds have been stolen or being held in a vault, but because all dollars are in international accounts that have been frozen,” he said. 

“Taliban should note this was in no way the decision of DAB or its professional staff. It is a direct result of the US sanctions policy implemented by OFAC (the American Office of Foreign Assets Control),” he said. 

In conclusion, Ahmady suggested the Taliban implement capital controls and limit dollar access.

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Pakistan’s Chaman border, closed for days due to fear of Afghans influx

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(Last Updated On: October 17, 2021)

A day after protesters took to the streets of Chaman in Pakistan to demand the re-opening of the border crossing into Afghanistan, scores were seen waiting by the border road on Saturday.

Hundreds of people are stranded on both sides of the Chaman border crossing that has been closed for almost two weeks now, Reuters reported.

“This border has been closed for the last 13 days. We have been sitting here for the past 13 days for it to open. We come here at 8:00 in the morning, but by 10:00 we go back, because they (officials) are saying it could not open for months. Whatever money we had earned, we have spent all of it here,” said Sami Ullah, a laborer from Baghlan province who had gone to Karachi for work.

Pakistani officials have said the border has been temporarily closed apparently due to the fear of an influx of Afghans who want to leave their homeland after the Islamic Emirate of Afghanistan (IEA) seized power in August.

Chaman border crossing , the second-largest commercial border point with Afghanistan after the Torkham commercial town in Khyber Pakhtunkhwa, links with Spin Boldak in the Afghan province of Kandahar, and is used by thousands of labourers, as well as traders, from both countries on a regular basis.

On Friday, thousands of traders took to the streets of Chaman, some on horseback, demanding that the border be opened, Reuters reported.

According to reports, thousands of Afghans have been gathering near the border in their efforts to sneak into Pakistan which has already announced that it was not in a position to accept more refugees.

Already around three million Afghan refugees are already living in Pakistan, some for more than three decades, since the invasion of their country by the Russians in 1979.

Pakistan officials say they fear around a million more would enter the country if border regulations are relaxed.

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Pakistan Airlines suspends Afghan operations citing IEA interference

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(Last Updated On: October 15, 2021)

Pakistan International Airlines (PIA) suspended flights to the Afghan capital, Kabul, on Thursday after what it called heavy handed interference by Islamic Emirate of Afghanistan (IEA) authorities.

The suspension took place after the IEA government ordered the airline, the only international company operating regularly out of Kabul, to cut ticket prices to levels seen before the fall of the Western-backed Afghan government in August.

“We are suspending our flight operations to Kabul from today because of the heavy handedness of the authorities,” a spokesman told Reuters.

Earlier, the IEA warned PIA and Afghan carrier Kam Air that their Afghan operations risked being blocked unless they agreed to cut ticket prices, which have spiralled to levels out of reach for most Afghans.

With most airlines no longer flying to Afghanistan, tickets for flights to the Pakistani capital, Islamabad, have been selling for as much as $2,500 on PIA, according to travel agents in Kabul, compared with $120-$150 before.

The Afghan transport ministry said in a statement prices on the route should “be adjusted to correspond with the conditions of a ticket before the victory of the Islamic Emirate” or the flights would be stopped.

It urged passengers and others to report any violations.

PIA, which runs chartered flights to Kabul rather than regular commercial services, said it had maintained the flights on “humanitarian grounds” and faced insurance premiums of as much as $400,000 per flight, Reuters reported.

“The insurance premiums on these flights are so high that it is simply impossible to operate scheduled flights to Kabul, as it is still considered a war zone by aircraft insurance companies and lessors,” the company said in a statement.

No comment was immediately available from Kam Air.

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Afghan Civil Aviation Authority warns PIA and Kam Air to drop ticket prices

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(Last Updated On: October 14, 2021)

The Civil Aviation Authority of Afghanistan has warned Pakistan PIA and Afghan airline Kam Air to adjust ticket prices for flights from Kabul to Islamabad to what they were before the new government came into power.

The announcement by the Civil Aviation Authority, which was published on Thursday, states that flights of these two airlines will be stopped on this route in the event of non-compliance.

The statement added that Afghans should file a complaint to the office if they see any violations.

Ticket prices are said to have skyrocketed to as much as $2,000 for a one-way ticket against an approximate average of about $200 to $300 following the takeover by the new government.

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