The U.S. Treasury says it will transfer $3.5 billion worth of assets belonging to Afghanistan's central bank to a new fund in Switzerland that is aimed at putting money into the war-torn country without going through Taliban militants who are in power.
The Treasury said in a statement on September 14 that the newly established Afghan Fund will be managed by a board of trustees who will look to help stabilize the economic situation in the country as it teeters on the brink of a humanitarian catastrophe with the United Nations saying nearly half of the population of 40 million people face "acute hunger."
The fund could be used to pay for critical imports such as electricity as well as for covering debt payments to international financial institutions, protecting Afghanistan's eligibility for development aid, and funding the printing of a new currency.
“The Afghan Fund will help mitigate the economic challenges facing Afghanistan while protecting and preserving $3.5 billion in reserves from Da Afghanistan Bank (DAB), Afghanistan’s central bank, for the benefit of the people of Afghanistan,” Wally Adeyemo, deputy secretary of the Treasury, said in the statement.
“The Taliban’s repression and economic mismanagement have exacerbated longstanding economic challenges for Afghanistan, including through actions that have diminished the capacity of key Afghan economic institutions and made the return of these funds to Afghanistan untenable," he added.
CNN quoted two senior U.S. officials as saying the funds won't be released immediately because there is no trusted institution in Afghanistan to guarantee the funds will benefit the Afghan people.
They added that transferring the funds to the Afghan central bank will depend on ensuring responsible management of the bank and assurances that the funds will not be diverted to terrorists or criminals.
The new fund will be located at the Basel-based Bank for International Settlements (BIS), which provides financial services to central banks.
Taliban militants took control of Afghanistan in August 2021 as international troops left the country.
Since then, international aid has been halted and the Taliban has failed to live up to its pledges to allow more freedoms to citizens than during its previous rule.