Afghan Banks Reopen with Long Lines...Cash Shortage Chaos Continues

[Image source=AP Yonhap News]

[Asia Economy Reporter Hyunwoo Lee] Banks in Afghanistan that had closed following the Taliban's entry into Kabul have resumed operations. However, confusion due to cash shortages continues, causing ongoing inconvenience for citizens.

According to Al Jazeera on the 25th (local time), banks in major cities including Kabul reopened after being temporarily closed since the Taliban's entry into Kabul on the 15th. With banks reopening after ten days, crowds of citizens lined up from early morning to withdraw cash, creating long queues at each bank, Al Jazeera reported.

However, as the Central Bank of Afghanistan has yet to normalize and the financial system is not functioning properly, banks are experiencing cash shortages, making it impossible to withdraw large sums. Some banks have even suspended cash withdrawal services entirely. Previously, Afghan banks had closed due to security concerns amid the Taliban offensive, but now normal operations are delayed due to cash shortages.

This is presumed to be because the United States froze all assets of the Central Bank of Afghanistan to cut off the Taliban's funding, the International Monetary Fund (IMF) has suspended the scheduled allocation of Special Drawing Rights (SDR) to Afghanistan, and even the World Bank (WB) has halted financial support. Previously, the Central Bank of Afghanistan was reported to hold a total of $9 billion (approximately 10.5 trillion KRW) in assets with international financial institutions such as the U.S. Federal Reserve (Fed), the Bank for International Settlements (BIS), and the World Bank (WB).

With cash becoming scarce, Afghanistan's real economy is facing severe difficulties. A Kabul resident told Al Jazeera in an interview, "I waited for four hours but couldn't get inside the bank," adding, "I have 20,000 Afghanis (about 270,000 KRW) in the bank, but it seems it will take several more days to withdraw it."

Due to cash shortages making it impossible to pay government employees' salaries, government offices and private businesses have closed, leading to a sharp increase in those effectively unemployed. Although the Taliban recently stated that the Ministry of Finance would pay government employees' salaries, citizens remain skeptical of this promise, Al Jazeera reported.

On the 23rd, the Taliban appointed Mohammad Idris, who managed Taliban operational funds, as acting governor of the Central Bank, initiating efforts to stabilize the economic turmoil. Idris blocked overseas dollar transfers and reopened banks temporarily. However, with severe inflation compounding the situation, Afghanistan's economic conditions are reportedly worsening.

This content was produced with the assistance of AI translation services.