IMF to not allocate funds to Afghanistan due to political uncertainty: Report

The IMF had recently announced a $650 billion special drawing rights allocation (SDR) for its member nations. The SDR allocation was made on August 23. However, Afghanistan is not allowed to access these funds at the moment.

The International Monetary Fund (IMF) has put on hold funds meant for Afghanistan due to political uncertainty in the war-ravaged country, Tolo News reported on Monday citing a spokesperson of the global financial body.

In this picture taken on September 19, 2021, a Taliban fighter (R) patrols along a street in Herat. (AFP)

The IMF had recently announced a $650 billion special drawing rights allocation (SDR) for its member nations. The SDR allocation was made on August 23. It will benefit all IMF member nations and will address the long-term global need for reserves and foster the resilience and stability of the world economy, the Tolo news report said.

Of the total allocation, $275 billion will be provided to developing and low-income nations.

However, Afghanistan is not allowed to access these funds at the moment.

This comes days after IMF spokesperson Gerry Rice, while addressing a press conference last Thursday, said the financial institution's engagement with Afghanistan has been suspended until there is clarity within the international community on recognising the government, the Tolo news report said.

“We're guided by the international community in terms of the recognition of the government in Afghanistan, and we don't have that. So, the IMF program there, which you asked about, has been put on hold. And again, as we said last month, the country cannot access IMF resources, SDRs and so on at this point,” Rice added.

Expressing concerns over the economic and humanitarian crisis in Afghanistan, Rice assured that the IMF is ready to work with the international community to advocate for urgent actions to stall the humanitarian crisis.

Since the Taliban took control of Afghanistan last month, ending a two-decade-long military mission led by the United States, the country has plunged into a severe economic crisis. Afghanistan's banking assets have been frozen since August 15, when the capital city of Kabul fell into the hands of the Islamic Emirate.

There is a constant fear that the worsening economic crisis could push millions of Afghan citizens into poverty and hunger. The United Nations Development Program (UNDP), said last week that 97% of the population is at risk of going below the poverty line. The UNDP said that 50% of the population already requires humanitarian support, adding, Afghanistan's real GDP could contract by 13.2%, which would cause an increase in the poverty rate of up to 25% points.