Lenders in Afghanistan are suffering a dollar cash crunch, and may even be forced to shut down their operations soon except there is a timely intervention and release of funds by the Taliban government.
The scarcity of cash poses a serious threat to the already weakened national economy, which survives mostly on hundreds of millions of dollars shipped by the United States to the apex bank in Kabul, which in turn makes its way to Afghans through the lenders.
It has now been a month since the Taliban took over Kabul, the nation’s capital, and lenders are worried that the unavailability of cash means that the cost of basic necessities like food and utilities will rise. The cash squeeze may also affect the ability of Afghans to trade and import.
While the cash squeeze has persisted for a while now, banks in the country are only now reiterating their worries to the new administration and apex bank.
In a bid to curb the situation, lenders have already limited certain services, while also imposing a weekly payout limit of US$200 as queues of customers get longer.
The situation is worsened by the fact that the central bank’s foreign reserves have been frozen since the Taliban took over, hindering efforts by the international community to provide the needed help to Afghans.
“We are left with liquidity of a few days’ payments only. If the government does not react to the situation immediately, there will be demonstrations and violence,” a source close to the matter said.
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