Taliban name obscure official to lead central bank in economic crisis

The Taliban appointed an obscure official as acting central bank governor as signs emerge of a financial crunch in Afghanistan, with ATMs running out of cash and prices of essential goods spiraling.

Mohammad Idris, who headed the Taliban’s economic commission, will “address the looming banking issues and the problems of the people” as head of Da Afghanistan Bank, Taliban spokesman Zabihullah Mujahed said on Twitter. Little is known about Idris, including his education background and professional qualifications in dealing with monetary, currency and banking policy.

The Taliban’s economic commission has operated in the shadows over the last 20 years, with the United Nations Security Council saying its activities included collecting illegal taxes from businesses and farmers to fund the militant group’s insurgency.

Prices of food essentials like flour and oil have risen by as much as 35% over the last week in Kabul, according to residents. Streets in the capital are largely empty as most banks, pharmacies and drugstores have closed, in contrast to the chaotic scenes at the international airport as the U.S. and other nations race to evacuate citizens and vulnerable Afghans. 

The Taliban is negotiating with banks to become operational soon, and the group’s fighters are patrolling the entire city to ensure security, Mujahed said.

Ajmal Ahmady, Afghanistan’s exiled central bank chief, told Bloomberg’s Odd Lots podcast that a Taliban-led Afghanistan faces a series of shocks that probably will lead to a weaker currency, faster inflation and capital controls. The Harvard graduate fled the country as Taliban militants advanced into Kabul on Aug. 15, joining other officials including former President Ashraf Ghani. 

Banks shut down soon after the militants took control and ATMs have been steadily running out of cash since then. The Afghani hit a record low last week.

“Even the Western Union offices are shut in Kabul,” said Mustafa Haqbeen, a Kabul resident and an English trainer at a private tutoring center, which is shuttered for now. “Food prices have never been higher. We are being suffocated.”

Afghan Finance Minister Quits, Leaves Country as Taliban Advance

Mohammad Rafi Tabe, a finance ministry spokesman, said Monday that banks would open within a few days. Even though the finance minister had left Afghanistan before the fall of Kabul, the ministry is back to work and all of its staff will remain in the same positions as they were before the Taliban took over, Tabe added.