How the Taliban’s central bank is trying to avoid banking and currency chaos

Having come to power and the head of the central bank, the Taliban made their first decisions. To avoid massive bank withdrawals and a domino collapse of the country’s few large establishments, withdrawals are limited to $ 200 per person per week. Fragile, the 13 major banks have around $ 3 billion in deposits and are unable to authorize large withdrawals. The central bank, whose resources are scarce, can only provide them with limited liquidity and funding, for a few weeks at most. Kabul’s ATMs are empty and the lines stretch out in front of banks to withdraw money.

Sensing the monetary and economic chaos linked to the US withdrawal, the previous team had doubled interest rates in July to 6%. The next monetary policy decision is expected in early October. Inflation surges. Since the Taliban arrived in Kabul, the prices of flour, rice and oil have risen by nearly 20%.

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