The Central Bank of Afghanistan has initiated the promotion of the Afghan currency in the country’s southwestern region since last week and has ordered to stop using Pakistani currency in the country reported Khaama Press.
Announcement by Central Bank
The Central Bank has further instructed the citizens and residents of the country’s southwestern provinces to cease their commercial transactions using the Pakistani Rupee and have been assigned a deadline. The residents have been given two and a half months to conduct their commercial transactions using the Afghan Currency and are advised to stop dealing with foreign currencies.
The announcement has been specially issued to residents of Kandahar, Uruzgan, Helmand, Zabul and Dykundi Provinces and has asked them to make the transactions using the national currency only reported Khaama Press. According to the announcement, after the specified date all transactions with other currencies will be termed illegal and legal action will be taken against the violators.
Afghani and its Woes
Afghanistan has a national currency called Afghani, but the currency, especially the printed notes is made overseas. During the first tenure of the Taliban, the local currency was used and printed in Russia. Due to the heavy devaluation of the currency, the officials of the Taliban Central Bank cancelled the contract with the Russians and after this occurred, the mujahideen and the warlords in the country began to issue their own currency.
Therefore, people living in Afghanistan were forced to carry out their daily transactions using the Pakistan rupee which caused Pakistan financially, economically and politically. Only after the Hamid Karzai government came to power, then the Afghans gain a national currency again in the form of Afghani.
Escalation Tensions and Border Skirmishes
Amidst escalating tensions between Afghan and Pakistani Border Guards, a tragic incident unfolded, resulting in the loss of four children, two members of the Taliban Forces and two Pakistani forces due to skirmishes. This unsettling event has sent shockwaves through the region, raising concerns about the volatile situation at the border.
The repercussions of these clashes have been far-reaching. In the aftermath of the violence, the Torkham Border crossing has been forcibly shut down. This closure has profoundly affected Afghan traders, who are in a precarious situation. They are stranded and unable to conduct their cross-border business activities and face the looming risk of losing their valuables and goods on both sides of the border.
The closure of the Torkham Border has disrupted trade and worsened an already fragile situation. On September 11, 2023, the Pakistani Foreign Minister said that the border closure was a response to the Afghan government’s infrastructure construction within Pakistani territory. As of now, there has yet to be an official response from the Taliban administration regarding the statements from the Ministry of Foreign Affairs.
Previous Cases
This is not the first time that Afghanistan has banned the use of the Pakistani currency. The Taliban Intelligence Agency Anti-Money Laundering Branch has ordered the Association of Money Exchange Dealers in a letter to completely ban the use of Pakistani Rupees in financial transactions in Afghanistan. This move gave a significant and major blow to the locals and traders who use the Pakistani rupee for everyday spending and food purchases.
The use of US dollars is widespread in Afghanistan’s markets, while border areas use the currency of neighbouring countries such as Pakistan for trade.
Apart from that, the money exchange dealers have been banned from conducting transactions totalling more than 500,000 rupees. “If more than the specified amount is discovered, the dealers could face legal action,” the letter stated.
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