Treasury moving to block IMF aid to Taliban

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The Treasury Department is taking steps to prevent the Taliban from accessing $450 million in aid from the International Monetary Fund in the wake of the group’s takeover of Afghanistan, according to a department official.

The IMF, with U.S. backing, is issuing billions of dollars worth of new “special drawing rights,” an asset that can be converted to government-backed money, to aid poorer countries. A portion of those assets is scheduled to be allocated to Afghanistan next week, an event that has generated urgent pushback from Republican lawmakers.

“The potential of the SDR allocation to provide nearly half a billion dollars in unconditional liquidity to a regime with a history of supporting terrorist actions against the United States and her allies is extremely concerning,” 17 House members said in a letter to Treasury Secretary Janet Yellen on Tuesday, calling on her to ensure the Taliban would not receive the aid.

The official’s confirmation that the department would move to block the allocation to Afghanistan is the latest effort by the U.S. government to withhold financial resources from the Taliban. It also cut off access to Afghanistan’s central bank assets, roughly $7 billion of which are held at the U.S. Federal Reserve, according to the head of Da Afghanistan Bank, who fled Kabul earlier this week.

The decision to pause the allocation of special drawing rights to Afghanistan would have to be made by the IMF board, on which the U.S. and its allies have a controlling number of votes. In the past, the IMF has blocked aid to countries, such as Venezuela, when the board did not agree to recognize the government as legitimate.

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