Afghanistan said on Sunday it won't be able to address a key International Monetary Fund concern over a looming cash crisis, sparked by a corruption scandal at a failed bank, for more than a month because lawmakers are on holidays.
Reuters reported on Friday that the IMF had rejected Afghanistan's plans to deal with the failed Kabulbank and other broader financial concerns, a step that automatically blocked the payment of $70 million in aid from foreign donors.
Diplomats involved in negotiations between aid-reliant Afghanistan, international donors and the IMF said Kabul had failed to address the fund's concerns and now fear a "cash crunch" as soon as next month.
Finance Minister Omar Zakhilwal said Afghanistan relied on aid for about 40 percent of its operating budget and for all of its multi-billion dollar reconstruction and development projects. He said the government would "exert every energy to reach a satisfactory agreement with donor countries".
"Suspending aid delivery will naturally cause difficulties for a country like Afghanistan," Zakhilwal said in a statement, the government's first official response since the latest tranche of aid was withheld. "So far, our difficulties are not at a level to cause us serious and immediate concern. I ask my compatriots not to be influenced by negative propaganda by some foreign media in this very critical stage in our history," he said.
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