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Did The NY Fed Confiscate $1.3 Billion In Afghan Gold: Striking Revelations From Afghanistan’s Central Bank Chief

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Did The NY Fed Confiscate $1.3 Billion In Afghan Gold: Striking Revelations From Afghanistan's Central Bank Chief

Originally published on ZeroHedge.

Yesterday morning, shortly after the acting Afghan central banker chief, Ajmal Ahmady, fled the country (after he was “somehow pushed on board” of a military plane by his colleagues), and warning on twitter that the country has no dollars left domestically (i.e., any dollars and gold currently stored at the local central bank vault have been pillaged by the Taliban even though the country’s new rulers vowed on Saturday that the treasury, public facilities and government offices were the property of the nation and “should be strictly guarded”), sparking domestic bank runs and a record rout in the local currency, the Afghani, some asked what that means for Afghan reserves stored offshore.

Conveniently, overnight Reuters provided a handy breakdown of the international reserves owned by the DAB (as the Afghani central bank is called). The most recent financial statement posted online shows DAB holds total assets of about $10 billion, including $1.3 billion-worth of gold reserves and $362 million in foreign currency cash reserves, according to currency conversion rates on June 21, the date of the report. Notably, a big chunk of the reserves aren’t held in the country as we observed yesterday.

Digging deeper, the DAB’s June statement stated that the bank owned investments worth $6.1 billion. While the latest report did not provide details of those investments, a breakdown in the year-end report showed that the majority of those investments were in the form of U.S. Treasury bonds and bills, most likely held by proxy at the Fed where they make up a portion of the $3.5 trillion in securities held in custody by the US central bank. As Reuters further notes, investments were made through the International Bank for Reconstruction and Development (IBRD), an arm of the World Bank, or through the FRBNY and held in New York. Among its smaller items are shares in an investment pool by the Bank for International Settlement, which is based in Switzerland, as well as the Economic Cooperation Organisation Trade and Development Bank in Turkey.

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