The Biden administration is working to prevent the Taliban from gaining access to more than $400 million in emergency reserves that the International Monetary Fund is scheduled to distribute to Afghanistan next week, a Treasury Department official said on Wednesday.
The I.M.F. is funded with contributions by its 190 member nations, and the United States is the largest shareholder. So its opposition to the Taliban obtaining access to the reserve assets, known as Special Drawing Rights, will carry significant weight as the fund decides what to do in the coming days.
The fund, which was established after World War II to help stabilize the global economy, is monitoring the reaction of its shareholders to the Taliban’s rise to power in Afghanistan to determine if the assets should be released, according to a person familiar with the matter who was not authorized to speak publicly.
The I.M.F. approved a $650 billion allocation of currency reserves earlier this month as part of an effort to help developing countries cope with the coronavirus pandemic. The reserve assets, which can be exchanged for dollars or other currencies, are divided among countries, and Afghanistan is set to receive about $460 million worth of them next week. Afghanistan currently holds about $52 million worth of SDRs.
The swift toppling of Afghanistan’s government and a lack of clarity about whether the Taliban will be recognized internationally have put the I.M.F. in a difficult position. The agency is guided by its member countries, and if a government is not recognized as legitimate then it cannot gain access to existing or new S.D.R.s, the person familiar with the matter said.
Canada, the European Union and Russia have said publicly that they are not ready to recognize the Taliban as the government in Afghanistan.
Jake Sullivan, the White House’s National Security Adviser, said Tuesday that it was too soon to address whether the United States will recognize the Taliban as the legitimate power in Afghanistan.
“Ultimately, it’s going to be up to the Taliban to show the rest of the world who they are and how they intend to proceed,” Mr. Sullivan said. “The track record has not been good, but it’s premature to address that question at this point.”
The United States remains engaged with the Taliban over the transfer of power in Afghanistan but has been careful not to let go of any leverage it has over the group.
The Treasury Department moved over the weekend to block access to $9.4 billion of international reserves held by Afghanistan’s central bank, most of which is stashed in accounts at the Federal Reserve Bank of New York.
Understand the Taliban Takeover in Afghanistan
Who are the Taliban? The Taliban arose in 1994 amid the turmoil that came after the withdrawal of Soviet forces from Afghanistan in 1989. They used brutal public punishments, including floggings, amputations and mass executions, to enforce their rules. Here’s more on their origin story and their record as rulers.
There is precedent for the I.M.F. to block countries from their currency reserves. Earlier this year, the fund said that Venezuela would not have access to the $5 billion of S.D.R.s that it would have received because of a dispute over the Maduro government’s legitimacy.
The Biden administration backed the allocation of new S.D.R.s over the opposition of some Republican lawmakers who argued that the United States was giving money to adversaries such as Russia, China and Iran. Treasury Secretary Janet L. Yellen has dismissed that idea, arguing that the United States would not agree to exchange dollars for S.D.R.s with a country it considers to be a bad actor.
A group of lawmakers sent a letter to Ms. Yellen on Tuesday, urging her to intervene in the scheduled release of $650 billion in International Monetary Fund emergency reserves.
“The potential of the S.D.R. 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,” they wrote.
The Treasury official would not say what steps the U.S. was taking to block the Taliban from getting access to the S.D.R.s
An I.M.F. spokeswoman declined to comment on when it would be determined if the currency reserves would be transferred to Afghanistan.