U.N. warns Afghan banks face meltdown

Afghanistan's economy has been plunged into chaos since the Taliban took over in August and most foreign aid was cut off.

But there could be worse to come.

On Monday (November 22) the United Nations warned that the country's financial system could collapse within months.

It says bank deposits are evaporating, new lending has dried up, and non-performing loans have almost doubled compared with the end of last year.

Ordinary people are feeling the pain.

The situation will get worse if world powers won't help, says this Kabul resident.

But solutions are complicated by a host of international sanctions.

That means the U.N. has to find a way to help the country's banks, without helping the Taliban.

Its proposals include deposit insurance and loan guarantees.

Last month the regime's acting information minister said its priority was to get access to assets now frozen by U.S. sanctions:

"All countries, with almost one voice, called on the U.S. to end its financial prohibitions on Afghanistan and to unfreeze Afghanistan's assets because this money is for the Afghan people and they were receiving their salaries from it, and therefore the U.S. has no right to freeze these funds."

But Afghanistan's financial system faces another pressing problem.

The supply of dollars threatens to run low.

Afghan banks had relied heavily on shipments of notes, which have stopped.

Experts say there's now a lack of cash in circulation, as local people stash away what little they have left.

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