Banking agreement strengthens Afghan economy
Source: US Department of Defense Press Release
By Army Sgt. Timothy Dinneen
COMBINED JOINT TASK FORCE- 82
COMBINED PRESS INFORMATION CENTER
BAGRAM AIRFIELD, AFGHANISTAN APO AE 09354
July 8, 2007
KABUL, Afghanistan - The commander of Task Force
Cincinnatus signed a memorandum of understanding with
the governor of DA Afghanistan Bank July 7, signifying
a maturing fiscal relationship between the Islamic
Republic of Afghanistan and U.S. forces.
The signing at DAB is a renewal of their original
March 2003 agreement to continue an exclusive banking
relationship in the hopes of further stimulating a
growing Afghan economy.
The MoU is also intended to move Army accounts to
the commercial banking industry that has grown from
zero to 17 private branches. The understanding deals
mostly with DAB Bagram branch operations but also
extends the fee schedule and physical cash supplies to
all U.S. Army accounts operated by DAB.
"This agreement will have a positive effect on the
[Afghan] economy by continuing to bring in U.S.
dollars and exchange them for Afghanis, which will be
used in the marketplace," said DAB Gov. Noorullah
Delawari. "This will also help [IRoA] armed forces as
Afghan National Security Force accounts will be
stabilized and accountable."
The agreement is designed to be mutually beneficial
for both parties. The continuing influx of U.S.
dollars into the Afghan central banking system will
strengthen Afghan currency (Afghani), give credibility
to private commercial banks enticing personal account
growth and reduce inflation by removing U.S. dollars
from the market in exchange for Afghanis. Furthermore,
the U.S. gains from DAB's expertise at Bagram Airfield
enabling U.S. forces to draw funds safely from their
accounts, allows contractors working on BAF to cash
their checks at a convenient location, and provides
the U.S. a competitive exchange rate fee.
"Our actions here today will further support
Afghanistan's economic goals and national debt relief
sponsored by the International Monetary Fund and World
Bank," said Army Col. Jonathan Ives, TF Cincinnatus
commander. "The key aspect of the debt relief program
is assurance of a stable Afghani as a national
currency in the eyes of the international community."
According to DAB's press release, approximately $40
million U.S. dollars is converted to Afghanis every
month and credited to U.S. Army bank accounts with
DAB. By operating exclusively in Afghani currency,
U.S. Army transactions have helped build a stable
Afghani by increasing foreign reserves.
The agreement will directly help the Afghan people
by building faith in the commercial banking system,
hopefully they will take their money from the
mattresses and open bank accounts increasing the
wealth of the country, explained Army Maj. Julie
Winston, 726th Finance Battalion executive officer.
The IRoA and U.S. banking relationship has seen an
Afghan economy grow at rates greater than 10 percent
on average during the past five years, according to
Alastair McKechnie, the director of the World Bank.