The International Monetary Fund, under pressure from the Biden administration, said Wednesday it will no longer release $450 million in funds that were scheduled to be sent to Afghanistan next week.
The move comes after the Treasury Department and congressional Republicans voiced concern about releasing the funds given the toppling of the US-backed government in Kabul by the Taliban.
In a statement, the IMF said Afghanistan cannot access the funds, known as Special Drawing Rights, or SDRs, due to the “lack of clarity within the international community regarding recognition of a government in Afghanistan.”
The controversy surrounds a previously scheduled allocation of the IMF’s own currency, known as Special Drawing Rights. SDRs can be exchanged for US dollars, euros, yen, Chinese yuan and sterling. The value of an SDR is set each day, based on a basket of currencies.
Earlier on Wednesday, a Treasury Department official told CNN that Treasury is taking steps to prevent the Taliban from accessing the IMF funds.
More than a dozen GOP lawmakers wrote a letter Tuesday to Treasury Secretary Janet Yellen expressing alarm over how the IMF was scheduled to send “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.”
Typically, when there is a dispute over who is in power in a nation set to receive SDRs, the IMF polls its members on how to proceed. In 2019, the IMF cut off Venezuela from $400 million in cash held at the funds after a majority of its members refused to recognize Nicolas Maduro’s government.