Taliban bans foreign currencies in Afghanistan amid financial catastrophe

Nov 3, 2021 | BUSINESS

The use of foreign currencies has been completely banned in Afghanistan, Taliban spokesman Zabihullah Mujahid said in a statement, citing national interests and current economic conditions as major reasons for the sudden move.

“The economic situation and national interests in the country require that all Afghans use Afghani currency in their every trade,” he said, stressing that those violating the new law will be prosecuted.

“The Islamic Emirate instructs all citizens, shopkeepers, traders, businessmen and the general public to henceforth conduct all transactions in Afghanis and strictly refrain from using foreign currency,” the statement posted online reads.

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American dollars have been widespread in Afghanistan’s markets, while trading in the border areas has reportedly been conducted with the currencies of neighboring nations such as Pakistan.

Afghanistan’s shaky economy has been struggling even more since the withdrawal of international financial support that occurred in August after the Taliban took control of the country.

The US, the World Bank and the International Monetary Fund (IMF) blocked Afghanistan’s access to more than $9.5 billion in assets stored abroad, and barred the country from receiving international loans. Before that, foreign financial aid had reportedly financed three quarters of public spending.

The ban on foreign currency is expected to deepen Afghanistan’s economic crisis, possibly causing a cash crunch that could lead to mass starvation and a new migration crisis.

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