Kabul: The United States on Wednesday announced that it would transfer $3.5 billion in Afghan central bank assets into a new Swiss-based trust fund that will be shielded from the Afghan ruling body and used to help stabilize Afghanistan’s collapsed economy.
The Afghan Fund, managed by a board of trustees, could pay for critical imports like electricity, cover debt payments to international financial institutions, protecting Afghanistan’s eligibility for development aid, and fund the printing of new currency.
“The Afghan Fund will protect, preserve and make targeted disbursements of that $3.5 billion to help provide greater stability to the Afghan economy,” the U.S. Treasury said in a statement.
U.S. officials said no money would go to the Afghan central bank, until it is “free of political interference”, Reuters report.
The new fund is housed in the Basel-based Bank for International Settlements (BIS), which provides financial services to central banks.
The fund will not resolve serious problems driving dire economic and humanitarian crises threatening to worsen as winter approaches. Nearly half of Afghanistan’s 40 million people face “acute hunger,” according to the United Nations.
Creation of the new trust fund comes after months of talks between U.S. President Joe Biden’s administration, Switzerland, other parties and the Taliban, who demanded the return of $7 billion in Afghan central bank assets held in the United States.
The talks continued despite U.S. allegation of AL Qaeda chief Ayman al-Zawahiri presence in Kabul, and international outrage on the group regarding human rights issues, including barring girls from secondary schools.
The fund, U.S. officials said, will be overseen by a board comprising a U.S. government representative, a Swiss government representative, Anwar Ahady, a former Afghan central bank chief and former finance minister, and Shah Mehrabi, a U.S. academic who remains on the DAB Supreme Council.