Moneyness: What happens to the Afghanistan central bank's assets?
The Afghanistan story is a tragic one and I don't have much to add to it apart from my ability to read central bank financial statements and balance sheets. Here's a quick analysis of the balance sheet of Afghanistan's central bank, da Afghanistan Bank. And following that, I'll provide some thoughts on what this means for Afghanistan. As always, feel free to add your opinions and data in the comments section. Da Afghanistan Bank issues the Afghan afghani, the currency symbol of which is the Af.
At year-end 2020 the central bank had 781 billion Afs worth of assets, which comes out to around US$9.5 billion at the current exchange rate of US$1-to-86 Afs. That's a lot of resources. No doubt the incoming Taliban regime is keen to access this $9.5 billion. But it will be tough for the Taliban to do so.
(Note: For the rest of this article, I will assume that da Afghanistan Bank's 2020 year-end numbers are similar to those prevailing as it is taken over by the Taliban.) In what follows I'm going to analyze the four biggest components of da Afghanistan Bank's balance sheet: gold reserves, foreign currency cash reserves, due from banks, and investments. 1. To repeat, da Afghanistan Bank lays claim to 781 billion Afs worth of assets. Of this amount it reports holding 703,000 troy ounces of gold, worth 101.77 billion Afs, or 13% of da Afghanistan Bank's assets. At the current gold price, this comes out to a whopping USD$1.25 billion.
