The Taliban ban the use of foreign currencies in Afghanistan

The Taliban announced the ban on foreign currencies in domestic transactions since Wednesday, a measure that seeks to refloat the local currency, which after the seizure of power by the fundamentalists in Afghanistan last August is at its lowest value in the last twenty years.

“The economic situation and the national interests of the country require that all Afghans use the Afghan currency in trade”Reads the statement issued by the Islamists, which warns that those who do not comply with the ban will be punished.

Thus, they noted, the Government informs “all Afghan citizens, traders, businessmen and generals who carry out any trade with Afghan currency and refrain from using foreign currency”, Since the use of foreign currency “It has negative effects on the country’s economy.”

Also, in an unexpected and positive gesture for consumers, the Afghan central bank decided today to increase the amount that can be withdrawn weekly from banks from $ 200 (with its conversion to Afghanis) to $ 400.

-Increased value-

The Taliban’s decision comes at a time of severe crisis for Afghanistan’s financial system, which has been on the brink of collapse since the United States froze aid funds to the nation after the Taliban took power.

The change from one dollar to Afghans has gone, since the Islamists took power in August, from 80 to 90 Afghans.

Ebadullah Nasiry, professor of Economics, pointed out to Efe that it is a measure “very effective in the current situation, but it needs a procedure and an organized mechanism to be implemented”.

“The cash transaction in Afghani will increase the demand for our currency, which will have a good effect.”, but “The Taliban have to focus not only on cash transactions, but the digital transaction is also important”added.

In this sense, Nasiry believes that the country should attract the attention of investors and businessmen to “bring back the stability of the Afghan currency,” whose value is among the lowest in the last two decades.

Today, Afghan private banks only allow transactions in Afghanis, a situation that has caused a rise in currency exchange rates, since they cannot operate with dollars.

“Given that our currency is experiencing its biggest decline, this is a good decision that will not only positively affect the stability of our currency, but will also reduce interest on exchange rates” and, little by little, the dollar will no longer be used in the country’s private banks, private financial sector specialist Arif Nikmal told Efe.

However, Mohammad, a currency exchanger in the southern province of Kandahar, did not welcome this decision and warned Efe that “Due to the instability in Afghanistan, the majority of businessmen, tellers and money changers have converted their capital into dollars or Pakistani rupees” so that the money does not lose value.

So he believes that the conversion of capital to Afghanis today will cause a great loss in a country “oriented towards imports (where) entrepreneurs need freedom to use different currencies and avoid loss in the exchange rate.”

“This decision must be taken little by little or systematically, to prevent instability and loss of the Afghani in the exchange rate”, he sentenced.