Afghanistan: Taliban ban foreign currency

Status: 03.11.2021 11:20 a.m.

According to the will of the Taliban, no currency other than the national Afghani should be allowed in Afghanistan. The ban on foreign means of payment threatens to exacerbate the economic collapse.

The radical Islamic Taliban ruling in Afghanistan have banned foreign currencies as a means of payment in their own country.

In a message from the Taliban-proclaimed “Islamic Emirates of Afghanistan” it said: “The economic situation and the national interest of the country require that all Afghans use the Afghani in every transaction.” This means that no retailer, company or business should be able to use another currency, such as the US dollar, which has been widely used as a means of payment in Afghanistan. In the border region with Pakistan, the Pakistani rupee was also widely used as a currency.

The Taliban are threatening penalties if residents fail to abide by the new ban.

Economy could be weakened further

The ban on foreign currencies threatens to exacerbate the deep economic crisis the country is suffering from. The United Nations (UN) had already warned in September that the already weak Afghan economy could collapse further as a result of the Taliban’s takeover in August. The poverty among the population threatened to increase sharply: At the time, the UN estimated that 97 percent of the population could live in poverty by the end of the year.

State reserves are frozen

After the seizure of power, several Western countries cut their financial support for Afghanistan for the time being. Germany also froze its development aid. The USA, together with the World Bank and the International Monetary Fund, put loans and assets totaling around 9.5 billion US dollars on hold. Afghan state reserves are still frozen in foreign accounts. Many Afghans employed in the civil service have therefore not been paid a salary for weeks.

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