A former member of the Afghan Central Bank’s supreme council, Shah Mahmood Mehrabi, said that the $3.5 billion in Afghan assets, which was transferred to the Bank for International Settlements, has made $8.5 million in interest.
In mid-September, Washington announced it would move the previously frozen financial assets into the newly created Afghan fund in Switzerland to be used to help stabilize the Afghan economy. Following this decision by the U.S., the Islamic Emirate denounced the U.S. decision to transfer $3.5 billion in Afghan central bank reserves to a Swiss-based trust fund, declaring it an “illegal venture” and vowing to impose financial penalties on entities that facilitate it.
The IEA Foreign Affairs Ministry had called it “unacceptable” and a “violation of international norms.”
“If the reserves are disbursed without taking into consideration legitimate demands of the Afghans, the Islamic Emirate will be forced to impose fines against, and ban activities of, all individuals, institutions and companies that facilitate this illegal venture and seek to misuse the central bank reserves for humanitarian and other purposes,” the ministry said in s statement in mid-September.
The United States froze $7 billion of Afghanistan’s financial reserves in New York immediately after the Islamist Emirate (IEA) seized power in mid-August 2021.
Mehrabi, who is also a member of the trust fund said that the decision regarding disbursement of the funds has not been made yet.
“Since November 2022, when the reserves were transferred to the BIS (Bank for International Settlements), $8.5 million in interest has been earned.
The decision regarding disbursement of funds has not been made,” Mehrabi said.
According to Mehrabi, Afghanistan’s reserves of $3.5 billion plus $36 million in interest was transferred to the BIS on November 7, 2022, and the amount was earned in interest prior to the transfer to the BIS.
“They should provide their reports quarterly about the interest of the Afghanistan’s assets,” said Seyar Qureshi, an economist. Meanwhile, the Ministry of Economy said the Afghan assets should be transferred to the caretaker government in Afghanistan.
“The Afghan assets and the interest earned from the $3.5 billion should be given to the Islamic Emirate,” said Abdul Latif Nazari, deputy Minister of Economy.
The U.S. in cooperation with the Swiss authorities have established a trust fund for the $3.5 billion Afghan assets which is half of the $7 billion in reserve of the New York Banks.
The board of trustees includes two Afghans, Shah Mahmood Mehrabi, who is also a member of Da Afghanistan Bank’s supreme council and former Minister of Finance, Anwar ul-haq Ahady as well two representatives from the U.S. and Swiss.
Shukria Kohistani
Afghan Trust Funds in Swiss makes $8.5 mln in interest
