The United Nations aims to kickstart this month a system to swap millions of aid dollars for Afghan currency in a plan to stem humanitarian and economic crises and bypass blacklisted Taliban leaders, Reuters reported, citing a UN note.
The report is based on an internal UN note seen by Reuters.
Foreign aid to Afghanistan has stalled since the fall of the previous government, and international banks have been cautious about US and US sanctions on the Taliban. Hence, aid agencies need cash.
Since the Taliban takeover in August, foreign financial assistance has stopped and international banks are wary of testing UN and US sanctions on the Taliban, leaving the aid groups struggling to obtain cash even as they continue to receive humanitarian donations.
The U.N. explanatory note, written last month, outlines an “urgently needed” Humanitarian Exchange Facility (HEF).
The HEF would allow the United Nations – which is seeking $4.4 billion for humanitarian assistance this year – and aid groups access to large amounts of the afghani, held in the country by private businesses. In exchange, the United Nations would use aid dollars – potentially tens of millions – to pay off the businesses’ foreign creditors, thereby bolstering the flagging private sector and critical imports.
“The facility’s flow of funds would not require the movement of funds across the Afghan border,” citing the UN note, Reuters added.
The United Nations has warned that more than half of Afghanistan’s 39 million people are suffering extreme hunger and the economy, education and social services are collapsing.
The UN note states that the humanitarian exchange facility will be established in February and will operate on a trial basis before it is fully operational.
It is also said that the new UN system for “the flow of funds and the exchange rate used and the withdrawal of afghani cash deposited into Afghanistan International Bank (AIB) without any restriction.”
UN spokesman Stephane Dujarric said in a statement that the United Nations does not comment on the leaked documents.
The United Nations and aid agencies have warned that the system could be only a temporary measure until the Central Bank of Afghanistan becomes independent and $9 billion frozen abroad are released.
It is unclear when Afghanistan’s foreign exchange reserves will be released. The United States froze the central bank’s foreign exchange reserves after the fall of the previous government. Officials say the money is being sued by victims of the 9/11 attacks.
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Source: Hasht-e Subh Daily