Taliban name acting head of Afghan central bank

The Taliban movement named a man who is said to be one of their financial organisers as acting head of Afghanistan’s central bank.

Mohammad Idris will become the acting governor of Da Afghanistan Bank according to a Taliban-issued statement, Afghanistan-based reporters said today (August 23). Taliban spokesman Zabihullah Mujahid said Idris would help organise Afghanistan’s financial institutions and address the economic problems facing the population.

A senior Taliban official told Reuters that the new acting governor had played a major role in organising the group’s finances. He said Idris had no formal training in finance or economics, but considerable practical experience and had the respect of other Taliban leaders.

A person with good knowledge of Afghanistan told Central Banking that he had been told that Idris was a tribal elder who had run Taliban finances. This person said that there were unconfirmed stories that Idris had been arrested by Pakistani authorities and released four years ago.

Afghan sources also claimed, this person said, that Idris was a friend of the Taliban leader Baradar Akhund and that he was also closely tied to another leader, Hibatullah Akhundzada.

Idris had worked closely on financing the Taliban with Akhtar Mansour, who was killed in a US drone strike in 2016. The new acting governor comes from the northern province of Jawzjan, the Taliban official who spoke to Reuters said.

The Taliban’s sources of financing are very opaque, but almost certainly involved foreign subsidies as well as involvement in the country’s agricultural and opium markets.

“There are many people who were unknown to the world but they held key positions and had great contributions,” Reuters quoted him as saying. “Idris is among them.”

Looming economic crisis

Afghanistan is facing a potential economic crisis following the Taliban’s rapid conquest of the country. Reporters in the capital Kabul said that banks and many government offices have been closed since the Taliban seized the city on August 15.

The prices of staple goods like food and fuel have been rising rapidly, a report published by Reuters said. Taliban leaders were trying to persuade government officials to return to work. Afghanistan’s neighbour Iran resumed its export of fuel to the country today, several reports said.

Under Afghanistan’s last period of Taliban rule, from 1996 to 2001, the group largely neglected economic management. The Taliban’s first appointment as central bank governor also continued as a military leader and was killed fighting.

The Afghan economy underwent large-scale demonetisation during the first Taliban government. Following the ousting of the first Taliban government by US-led forces in 2001, the DAB was effectively restored with the help of international experts.

The country’s currency, the Afghani, was relatively stable, but was backed by a large supply of dollars from the US government. That supply was suspended as the Taliban began to take Kabul.

The Taliban regime is also currently unable to access most of the DAB’s other assets, which are mainly deposited with international or US institutions. The International Monetary Fund has also suspended the Afghan state’s access to special drawing rights.

One commentator has warned that continuing to block access to financial assets could lead to a sustained currency depreciation and possibly to hyperinflation.

Pakistan, Saudi Arabia and the United Arab Emirates all supported the first Taliban government, and may well recognise the new regime. China and Russia have also indicated a willingness to work with the Taliban.

The DAB’s previous acting governor, Ajmal Ahmady, fled the country in a UAE military plane on August 15. Ahmady’s tenure at the central bank was marked by major controversy, with people close to events making detailed allegations of malpractice against him.

The World Bank suspended its aid to Afghanistan in 2020 after the central bank stopped publishing regulatory data on the country’s banks.