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IMF begin takeover: Afghan gov’t OK $825 million bailout for Kabul Bank bailout
Posted By kurtnimmo On October 17, 2011 @ 8:27 am In Economic Crisis | Comments Disabled
October 17, 2011
KABUL — Afghan lawmakers agreed on Saturday to reimburse the government for bailing out the Kabul Bank, which nearly collapsed last year because of mismanagement and hundreds of millions of dollars in questionable loans.
The lower house passed a bill to provide up to $825 million over the next eight years to recapitalize Afghanistan’s central bank — a move that smooths the way for the International Monetary Fund to extend Afghanistan a new line of credit. Afghanistan has been without IMF backing for more than a year, threatening to choke off billions in aid to the country.
The Kabul Bank debacle has become a symbol of the country’s deep-rooted corruption. The case is being closely followed by Afghans and international donors because it is a barometer of government officials’ pledge to root out patronage, graft and show accountability to world financial institutions, such as the IMF.
A parliamentary decision to provide money to shore up the central bank was a key step requested by the IMF in meetings earlier this month, the Afghan Finance Ministry said in a statement.
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