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PublishDate: Wednesday, December 8, 2021 16:00

Devalued Afghan Currency Adds to the Miseries of Civilian Population

Civilians suffer the most from the devaluation of the Afghan currency.

Afghan Voice Agency (AVA)_For the first time, the value of the against the national currency exceeded 100 afghanis. Sarai Shahzada, the country’s largest currency exchange market, announced on Tuesday that the value of the dollar had risen to 100 afghanis for the first time in the last two decades. The dollar traded at 102 afghanis and more in Kabul markets on Tuesday. The decline comes as the central bank has been unable to control the value of the dollar in recent days.

The dramatic devaluation of the did not happen overnight. Given the dependence of Afghan markets on the dollar and its trading, the governments of Hamid Karzai and Ashraf both had to spend part of their foreign aid on auction to increase the dollar in the market and prevent the depreciation of the Afghan currency. While previous governments could have reduced Afghanistan’s markets’ reliance on the dollar to some extent by rational planning in the short and long term, they did not do so. For this reason, Ajmal Ahmadi, the former head of the Central Bank, in the last days of the fall of Ashraf Ghani’s government, with putting an average of 30 to 40 million dollars in auction per day, tried to prevent this money from falling during his tenure, because of a significant reduction. The value of the national currency could have damaged his position and that of his team.

Currently, part of the problem is the dependence of Afghan markets on the dollar and part on the same lack of money. Ajmal Ahmadi’s action caused the country’s markets to face a serious shortage of dollars. “The ’s dollar reserves are being depleted,” according to a report published by before the fall of Kabul. According to Ajmal Ahmadi, the dollar’s deprivation of dollars was seen as a deliberate depletion of the central bank’s dollar reserves, as Ajmal Ahmadi also tried to invest the dollar reserves in the US Treasury Department from the central bank. Finally, after the fall of Kabul, Reuters reported that Ajmal Ahmadi had depleted the central bank’s dollar reserves. He had even run out of dollars in private banks, and as a result, most banks have run out of dollars in the last three months.

Now that the situation is becoming more complicated, the Taliban-led government has not yet been able to gain access to its dollar reserves and use them in Afghan markets. Thus, the previous unplanned and current carelessness in preserving the value of the national currency is worrying. Continuation of these conditions will be very harmful and can increase the existing challenges for the citizens.

Unfortunately, in such a situation, the people suffer the most from the devaluation of the . At present, most of the buying and selling of raw materials and other goods is done in dollars. The higher the value of the dollar against the Afghan currency, the more people become incapable of buying the necessities of life. The prices of gas, flour, oil, rice, and the materials that people need daily have risen to an all-time high. If this trend continues in the current crisis, there is no doubt that the UN forecast for the spread of poverty will happen much sooner, and a large percentage of people may fall below the poverty line in a few months.

Unfortunately, the Taliban-led government has not yet taken a useful step toward gaining access to foreign exchange reserves and controlling the dollar exchange rate. Taliban officials know that the only way to reduce the dollar immediately is to inject it into markets and make it accessible to the public. This is something that the Taliban are unable to do due to the cessation of direct international aid and the imposition of restrictions. In contrast, the central bank sees a drop in the dollar as inevitable, encouraging people to trade with Afghans. From such measures, it appears that reducing the dollar rate in the short term is not within the power of the Taliban-led government. At a time when the value of the dollar needs to be stable, they are trying to reduce the dependence of Afghan markets on the dollar to zero. Achieving these two goals at the same time seems impossible.

The Taliban must understand the situation of the people and the critical situation of the country, and provide the ground for global interaction and access to the central bank’s foreign exchange reserves as soon as possible. The longer access to foreign exchange reserves takes time and the Taliban are unable to absorb international aid, the less the Afghan currency will depreciate against the dollar. It is better for the ruling Taliban government, in consultation with banking insiders, to set up appropriate short- and long-term ways to control the dollar. If the Taliban focus on their plans and do not take sensible ways to maintain the stability of the national currency, the situation will become more complicated and, unfortunately, these stunts will break people’s backs in the short and long term.


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