IMF announces suspension of funding to Afghanistan after Taliban advance

The Fund has already taken similar measures when a part of its members do not recognize the government of a country, as in the case of Venezuela. The IMF has 190 member countries spread across Afghanistan.

After two decades of trying to defeat the Taliban, Western powers are faced with the difficult choice of establishing or not establishing relations with the fundamentalist group that now controls Afghanistan.

Canada has already announced that it will not recognize the Taliban. France listed five preconditions. Russia, China and Turkey welcomed the insurgents’ first public statements.

The IMF was to release a final tranche of aid to Kabul as part of a program approved on November 6, 2020 for a total amount of $ 370 million.

This 42-month (three-and-a-half-year) program resulted in an immediate expenditure of $ 115 million. A second tranche of aid amounting to $ 149.4 million was disbursed in early June, following a first review of the progress of the program.

Some 105.6 million dollars remained to be delivered for this aid plan, granted as part of the Extended credit facility, whose objective was to support the Afghan economy, strongly affected by the covid-19 pandemic.

Created in 1969, SDRs are not currency and have no physical existence. Its value is based on a basket of five major international currencies: the dollar, the euro, the pound, the yuan and the yen. Once issued, SDRs can be used as a reserve currency that stabilizes the value of the national currency or they can be converted into stronger currencies to finance investments.