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Billions of dollars from humanitarian aid and rising trade with Asian neighbours has propelled Afghanistan’s currency to the top of global rankings this quarter – an unusual spot for a poverty-stricken country.
The Taliban, which seized power two years ago, has also unleashed a series of measures to keep the Afghani in a stronghold, including banning the use of dollars and Pakistani rupees in local transactions and tightening restrictions on bringing greenbacks outside the country. It has made online trading illegal and threatened those who violate the rules with imprisonment. The currency controls, cash inflows and other remittances have helped the Afghani climb around 9% this quarter, outpacing the likes of the Colombian peso’s 3% gain, data showed. The Afghani is up about 14% for the year, putting it third on the global list, behind the currencies of Colombia and Sri Lanka. Yet, unemployment is rampant, two thirds of households struggle to afford basic items and inflation has turned into deflation, the World Bank has said. “Hard currency controls are working, but the economic, social and political instability will render this rise in currency as short-term phenomenon,” said an expert.
The Taliban, which seized power two years ago, has also unleashed a series of measures to keep the Afghani in a stronghold, including banning the use of dollars and Pakistani rupees in local transactions and tightening restrictions on bringing greenbacks outside the country. It has made online trading illegal and threatened those who violate the rules with imprisonment. The currency controls, cash inflows and other remittances have helped the Afghani climb around 9% this quarter, outpacing the likes of the Colombian peso’s 3% gain, data showed. The Afghani is up about 14% for the year, putting it third on the global list, behind the currencies of Colombia and Sri Lanka. Yet, unemployment is rampant, two thirds of households struggle to afford basic items and inflation has turned into deflation, the World Bank has said. “Hard currency controls are working, but the economic, social and political instability will render this rise in currency as short-term phenomenon,” said an expert.
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