December 5, 2022

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Taliban govt bans foreign currencies to keep Afghanistan economy afloat

The Taliban federal government has banned the use of overseas currencies in Afghanistan in a shock go that could weigh on an financial system battling with a cash crunch and even further isolate the country.

The go came as the Taliban were pushing for the release of billions of bucks of reserves abroad, which was frozen by the U.S. and its Western allies considering the fact that the group swept into the electrical power in August. With out these reserves, Afghanistan has been properly shut out of the international financial program.

The militant group has requested the public, such as shopkeepers to businessmen, to carry out all trade in afghani forex for the sake of nationwide pursuits and to assist the financial condition, Taliban spokesman Zabihullah Mujahed said.

“The use of overseas currencies has negative consequences on the country’s financial system,” he said in a assertion. “Violators will be dealt with legally.”

It is unclear how the Taliban will enforce this ruling supplied that Afghanistan’s financial system has been propped by U.S. bucks for extra than twenty many years. Two-thirds of Afghan banks’ deposits and 50 percent of the country’s nationwide loans are in U.S. bucks.

The greenback is favored in excess of the local afghani to pay back for imported products and services as well as major-ticket transactions these kinds of as acquiring a home or shelling out for non-public university tuition. The ban could also complicate humanitarian help from abroad, which will be critical for the country as a harsh wintertime techniques.

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