IMF to withhold $460M in funds from Afghanistan after Taliban takeover

The International Monetary Fund on Thursday announced it will block $460 million in funds that were scheduled to be sent to Afghanistan next week.

The decision followed U.S. pressure on the IMF to ensure the funds did not reach the Taliban, which toppled the Afghan government and took control of the country this week.

“There is currently a lack of clarity within the international community regarding recognition of a government in Afghanistan, as a consequence of which the country cannot access SDRs or other IMF resources,” Gerry Rice, an IMF spokesman, said in a statement.

Mr. Rice added that the decision was guided by the views of the international community.

The IMF is funded by contributions from its 190 member nations, including the U.S. It lends those funds struggling to stabilize their economy and sustain economic growth.

The IMF has its own currency, known as Special Drawing Rights or SDRs, that can be exchanged by the borrowing nation for U.S. dollars, Euros, or other currencies. The value of an SDR is established based on the value of multiple global currencies.

Afghanistan was scheduled to receive $460 million in SDRs next week. But the U.S., which is the largest IMF shareholder, pressured the financial institution to withhold the funds from the Taliban.

The Biden administration and GOP lawmakers, in a rare moment of bipartisanship, sought to block the release of the funds.

Republican lawmakers sent a letter to Treasury Secretary Janet Yellen asking her to intervene before the IMF disbursed the funds to the Taliban.

“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,” the Republican congressman wrote.

Earlier this week, the Treasury Department froze billions of Afghan government reserves held in U.S. bank accounts to prevent the money from falling into the hands of the Taliban.