US facilitates payment to European mints for Afghan banknotes

Photo: Reuters

US State Department Spokesman Ned Price said on Tuesday new bank notes for Afghanistan will be printed in Europe which, once in circulation, will address one of the aspects of the country’s ongoing liquidity crisis.

Addressing a press conference in Washington, Price said two transactions have been underway for the past two months as part of efforts to make sure new banknotes are printed for Afghanistan, “which is out of cash and is dealing with crumbling banknotes”.

He said the matter is “highly technical” and important for the country.

“The United States and our partners have been working hard with international banks to facilitate payment transfers from Afghanistan’s central bank to European printing companies where new banknotes would actually be produced,” Price said, but he did not mention when the process would be complete nor did he say when the new banknotes would begin to be circulated.

Afghanistan, which has a predominantly cash-driven domestic market, does not have its own mint and has in the past commissioned foreign mints to print its cash.

Under the previous government, a contract had been in place with a Polish mint to print new banknotes. However, details have not been released as yet on where the new bank notes will be printed.

“These companies will now prepare new afghanis, which will be used to replace worn-out banknotes,” Price said. “And this will address one of the aspects of Afghanistan’s ongoing liquidity crisis, consistent with US efforts to support basic human needs and avoid an economic collapse.”

He said that as has been widely reported, Afghanistan’s markets, even today, run widely on cash, but existing banknotes are crumbling.

Price said the process to transfer the printed money to Afghanistan and the payment to the European banks does not impact US-Taliban relations but it is about the welfare and the well-being of the Afghan people who have suffered from the deterioration of these banknotes.

“Their largely cash-driven economy has been hamstrung by the lack of banknotes that are not crumbled or otherwise deteriorated,” he added.

Taliban has said the new banknotes will soon be sent to Afghanistan but has not provided an exact date on this.