Afghanistan currency at an 'unusual spot', has become the world's best performing currency this quarter.
Afghanistan has found itself in an “unusual spot”. Afghani, Afghanistan’s currency, is the world”s best performing currency this quarter. Amid the worst scenarios of poverty and terror sprawled across the country and with world”s worst human rights record, Afghani to be at the top of global rankings is an unheard story.
Increasing trade with Asian neighbours and billions of dollars flowing in from humanitarian aid is believed to be the reason behind this surge.
The Taliban rule has imposed several measures to keep the Afghani afloat. Banning Pakistani rupees and dollars and banning online trading were among such measures. A data put forward by Bloomberg show that the “currency control and cash inflows” abled afghani to rise about 9% this quarter, ousting the probability of Colombian peso”s 3% gain. Afghani is now at the third position on the global list with 14% rise for the year.
As per the world bank report, two third of the household wrestle with the economy to take home basic essentials in Afghanistan. Inflation has keeled to deflation and unemployment is soaring high. Rounding on all these, the country is still at the bottom step of any form of development.
From the dusk of 2021, sum of about $40 million flew to Afghanistan on weekly basis for the past 18 months from the United Nation’s support for poor.
Kamran Bokhari, an expert in Middle Eastern, Central and South Asian affairs at the Washington – based New Lines Institute for Strategy & Policy stated, “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”.
Sarai Shahzada market in Kabul is Afghanistan”s financial hub currently. “Sarrafs”, the money changers through which the foreign exchange is now largely happening, put up stalls and shops in cities and villages. According to central bank, there is no boundary to trading, says report.
Almost all of financial remittances are now happening through the age old Hawala money transfer system due to the financial sanctions. This is the most prominent part of the sarrafs” business.
However, the country”s overall financial and humanitarian appearance is crippling. According to Special Inspector General for Afghanistan Reconstruction”s July report, though US had decided to extricate $3.5 billion from the $9.5 billions of frozen foreign-exchange reserves, later called pause to the plan after finding out about the central bank”s inability to extract its power from Taliban and the countering measures of terrorism financing is not going through a straight path. Earlier, UN reported the Taliban committing nearly 1600 humanitarian violations.
