IMF suspends Afghanistan’s access to SDR resources

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The IMF said Friday it has advanced efforts to secure an aid program to help Lebanon overcome its "unprecedented and complex" economic crisis. AFP
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  • IMF says the SDR has been suspended because there is no clarity at present on the recognition of the government in Afghanistan.
  • The war-ravaged country could access around $440 million in new monetary reserves.

DUBAI: The International Monetary Fund (IMF) has suspended Afghanistan’s access to IMF resources amid pressure from the US Treasury to prevent the reserves from falling into Taliban hands.

An IMF spokesman said Afghanistan cannot access the Special Drawing Rights reserves allocation scheduled for Monday or other IMF resources because “currently there is a lack of clarity” within the international community regarding recognition of a government in the country, according to media reports.

Afghanistan could access around $440 million in new monetary reserves but the US Treasury, which holds a controlling share in the fund, has reportedly build the pressure to deny Taliban, which took control of the country, the access to the money.

The IMF is expected to complete a $650 billion allocation of SDRs – the fund’s unit of exchange based on dollars, euros, yen, sterling and yuan – on Monday, to its 190 member countries in proportion to their shareholdings in the fund.

The increase in reserves is aimed at bolstering the balance sheets of poorer countries that have been severely strained by the coronavirus pandemic.

The fund previously suspended Venezuela’s SDR access after more than 50 member countries, representing a majority of the fund’s shareholding, refused to recognize the government following President Nicolas Maduro’s disputed re-election. The IMF also suspended dealings with Myanmar after the military seized power in February, the reports added.

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