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Afghanistan’s currency emerges as world’s best performer this quarter: report

  • Ruling Taliban have unleashed series of measures to keep afghani in stronghold
Published September 26, 2023

Despite facing global sanctions, Afghanistan’s currency – the afghani – has emerged as the best-performing one this quarter as billions of dollars in humanitarian aid and rising trade with Asian neighbours propelled it to climb around 9% in the said period, reported Bloomberg on Tuesday.

“The ruling 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,” Bloomberg stated in its report.

The Afghan authorities have also barred online trading and threatened to use punitive measures such as imprisonment for those who violate the rules, it added.

As per data compiled by Bloomberg, the afghani has risen around 9% this quarter, outpacing the likes of the Colombian peso’s 3% appreciation.

Source: Bloomberg
Source: Bloomberg

“The afghani is up about 14% for the year, putting it third on the global list, behind the currencies of Colombia and Sri Lanka,” the report added.

The afghani’s climb comes in stark contrast to its neighbour Pakistan, where the rupee has lost nearly 22% of its value in the ongoing calendar year alone – despite the recent 6% gain this month.

“The hard currency controls are working, but the economic, social and political instability will render this rise in the currency as a short-term phenomenon,” Kamran Bokhari, an expert in Middle Eastern, Central and South Asian affairs at the Washington-based New Lines Institute for Strategy & Policy, was quoted as saying by Bloomberg.

As per the report, foreign exchange in the landlocked country is being traded largely via money changers.

“The bustling, open-air market Sarai Shahzada in Kabul is the de-facto financial hub of the country, where the equivalent of tens of millions of dollars cross hands every day,” said the report.

Meanwhile, remittances to Afghanistan are being brought into the country via the Hawala system, it added.

“Tightened restrictions on foreign exchange transactions and a very gradual improvement in trade are pushing up demand for the afghani,” said Anwita Basu, head of Europe country risk at BMI in London.

The afghani is likely to stabilise at current levels until the end of the year, Basu was further quoted as saying by Bloomberg.

The report noted that as pressure on Afghani eased, Afghanistan’s central bank has raised the limit for dollar withdrawals to $40,000 per month for businesses from $25,000 and $600 a week for individuals from $200 two years ago.

The development comes as a surprise for many as the landlocked country is witnessing rampant unemployment and two-thirds of houses are struggling to afford basic items and inflation has turned into deflation, according to a World Bank report.


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Az_Iz Sep 26, 2023 06:20pm
Lift all the sanctions. Afghans have suffered enough.
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Doc Asad Sep 26, 2023 06:43pm
But .. but .. but ... they dont have lumber one army :o
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Dr fahad Sep 26, 2023 08:04pm
@Doc Asad, go and live there
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Sunehra Sep 26, 2023 11:42pm
@Doc Asad, number one army Islamic atomic country World best present ISI Nawaz Sharif n Maryam Nawaz
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Tulukan Mairandi Sep 27, 2023 08:37am
We will be successful like Afghanistan if only TTP rules our beloved country
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Haris Sep 27, 2023 09:24am
@Sunehra, the dacoit number one and his good for nothing daughter. Not to mention the adventures involving garage
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Haris Sep 27, 2023 09:26am
@Dr fahad , if conditions this side of Durand line persist as they are, surely a time will come when people will have no other option but to work and live in Afghanistan. China has already opened up an alternative route to Chabahar port via Afghanistan.
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Aamir Sep 27, 2023 10:04am
@Tulukan Mairandi, please leave Pakistan immediately with your family and live in the Golden Era of the Taliban in Afghanistan.
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Az_Iz Sep 27, 2023 10:17am
Awaiting another article on how we should learn from Afghanistan.
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Usman Sep 27, 2023 12:19pm
Remove sanctions and see how the afghani goes out of control as imports will start.this is the same like pakistani ruppe.once we stop imports it appreciates.once we open imports it goes out of control.
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Usman Sep 27, 2023 12:22pm
@Haris , india did to chahbahar too what happened.afghnais will sell for a dollar the chinese will buy them and than make them there colony.
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Syed Sep 27, 2023 06:28pm
@Usman, your mind has become colony of false notions. Plesase Tell us how many countries China has colonised.
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Muhammad Shehreyar Khan Sep 27, 2023 06:39pm
@Dr fahad , Lift the sanctions and see the miracles. Plus countries aren't governed on emotions & disparity between rich & poor like in Pakistan is but through prevalence of justice, equality and rule of law. As Carl Schultz said "My country right or wrong; if right to keep it right, if wrong to set it right".
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Muhammad Shehreyar Khan Sep 27, 2023 06:48pm
@Aamir , Pakistan is made of different ethnicities not the other way around. You have the audacity to ask someone to leave the country and are quick to judge him if he questions or criticize this decayed old system but stand hypocritically silent when the stake holders of this country suffers i.e. Pashtuns in War on Terror, drone strikes, Baloch missing persons. This colonial mind set of your is already tearing this fragile confederation apart. No one will leave the country rather break apart like Bangladesh if this tyranny goes on unchecked under the known unknowns.
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Javed Afridi Sep 27, 2023 08:36pm
As a Pakistani having various businesses setup in Afghanistan, I find Afghans more enterprising, honest and hardworking than Pakistanis. I have no doubt that afghanistan will thrive under suitable atmosphere.
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SHUJAAT SYED Sep 28, 2023 12:01am
@Javed Afridi Why you not packing your family for Afghanistan, go and try to become a proud Afgani.
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Ajmal Sep 28, 2023 09:08am
@Usman, you have import restrictions and we in Afghanistan no have any import restrictions if you study or go to Afghanistan you check what we cannot import we can import as much gold best cars in Afghanistan we have that you will not see in Pakistan be man earn money and spend in Afghanistan there is nothing that we cannot import. Not as your country that ask people drink less green tea to reduce import bill.
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