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Daily Evacuation Brief | February 21, 2022
Daily news about Afghanistan and the surrounding region powered by Operation Snow Leopard
LAST 24 HOURS:
Storms and avalanches have closed the Salang Pass to all vehicular traffic.
Another earthquake struck 30 km north of Kunduz. It registered as a 4.6, and no damage or casualties have been reported.
NEXT 24 HOURS:
Sources report trouble is brewing at the Azizi Bank, the largest commercial bank in Afghanistan. Recent audits have uncovered a money funneling scheme originating within the Azizi Group:
Reportedly they were passing deposits through an Indian company to buy real estate in Dubai, then returning the profits to the Azizi Group.
Reports claim that $80-90 million was spent in the scam, and the board was told it was being invested in stocks and commodities. The CEO is said to have resigned. As one of the larger private banks in the country, a scandal could destabilize the economy even further.
There are reports the Taliban will be patrolling the markets in force over the next two days. They are supposedly looking to disrupt three major black market gangs.
IS PAKISTAN EXPLOITING THE KANDAHARI–HAQQANI RIFT?
CONTEXT: Recent reporting from within the palace note that the visit by the Pakistan Government officials earlier this month included a separate meeting with Sirajuddin Haqqani, Khalil-ur-Rehman Haqqani, and Ibrahim Haqqani. In the meeting they were encouraged to ‘step-up’ their stealth opposition campaign against the Baradar/Hassan Kandahari government. Specific tactics discussed were increasing the number of arrests and assassinations so – ‘the world would turn away from Mullah Baradar and Mullah Hassan.’
ANALYSIS: If true, it isn’t clear yet what Pakistan hopes to gain from an Haqqani ascendency. That the meeting is being openly discussed within the palace walls is problematic enough and illustrates the distrust between both camps. Splinter factions and opposition groups will seek to exploit the schism.
SELLING AFGHANISTAN’S FOREIGN RESERVES
CONTEXT: The Afghani has generally been steady over the last several years, but following the Taliban takeover its exchange rate against the US dollar (USD) plummeted, hitting its lowest level against the USD in two decades. Faced with an unstable currency and continued fears of devaluation, Afghanistan’s Central Bank has initiated its third round of selling dollars in an attempt to bolster the Afghani against the USD.
DISCUSSION: Utilizing foreign reserves to raise or lower a domestic currency’s exchange price is often effective and will likely deliver short-term benefits by taking some pressure off of the Afghani. However, given that the Taliban’s frozen assets have not yet been distributed to them and the previous regime sold off the majority of in-country reserves in the months before Kabul’s fall, the Taliban’s access to USDs is likely extremely limited. As a result, they will very quickly lose the ability to use this economic tool, and the effects will likely be minimal. Furthermore, selling foreign reserves is not always effective. For example, Turkey’s efforts to sell USD in reserve proved counterproductive as the lira remained devalued and currency reserves further dwindled.
Two other classic tools to combat inflation are to implement capital controls or raise interest rates. The Taliban quickly implemented capital controls to very little effect and have already seen negative ramifications from their ban on foreign currency. Furthermore, although they promised to raise interest rates early on, manipulating interest rates cannot be a long-term solution in a fundementalist regime given that charging interest is banned within Islamic banking models. As Afghan banking institutions transition into more extremist policies, the currency could be further impacted.
ANALYSIS: Given the Taliban’s extremely limited pool of reserve funds to draw from, Afghanistan’s outcome may be similar to Turkey’s: no exchange rate gains and further drained reserves. It is clear this approach is not sustainable and may even be harmful. The Taliban urgently need to look to more long-term efforts to bolster the currency. Although an inflow of aid will be critical for supporting the currency, foreign investment and encouraging more foreign currency in the Afghan market will be essential for rebuilding the currency’s value.
Afghani to the Dollar: $1 – 91.99 AFN (as of 21 FEB 2022)
By TOLO News
The Central Bank said it has released millions of US dollars into the market to preserve the value of the…
By Bakhtar News Agency
The Ministry of National Defense has announced that one hundred and fifty soldiers have graduated from the training center of…
By Ahmad Sohaib Hasrat – Pajhwok Afghan News
Acting Mines and Petroleum Minister ShahabuddinDilawar has termed the auctioning of mining contacts a…
By Ahmad Shah Erfanyar -Pajhwok Afghan News
Iranian army chief says the border between Afghanistan and Iran is well secured and if any…
By MEHR News Agency
Referring to negotiations held during the visit of the related Taliban Minister to Iran and the meeting of…
By Naseer Ganai – Outlook India
Since the withdrawal of the US troops from Afghanistan, many analysts have been talking about the likely impact of…
International News Relating to Afghanistan
By TOLO News
The United Nations Children Fund (UNICEF) is considering paying an amount of $100 per month for nearly 200,000 public school…
By ANI News
The US special envoy has discussed the humanitarian situation as well as human rights in Afghanistan with…
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