Amid a steep decline in the value of Afghanistan’s currency, the afghani, the Taliban-controlled central bank announced it will auction $27 million on Wednesday in an effort to stabilize the market.
This marks the third dollar auction by the central bank in a week. The Taliban previously sold $45 million on Saturday and Monday, a strategy that has so far failed to halt the currency’s slide.
Noor Ahmad Agha, the Taliban-appointed head of the central bank, urged private banks to conduct transactions in afghanis rather than foreign currencies to bolster the currency’s value.
Currently, one U.S. dollar is trading at nearly 80 afghanis, although rates fluctuate frequently.
Currency traders in Kabul report increasing interference by the Taliban in market operations. According to traders interviewed by Amu, the Taliban halted rate-setting activities at Sarai Shahzada, Kabul’s main currency exchange market, three days ago. On Sunday evening, Taliban forces reportedly entered Sarai Shahzada and Sarai Haidari, another exchange market in Kabul, detaining more than ten traders.
Taliban have also shut down WhatsApp and Telegram groups used by traders for coordinating exchange rates. These groups had been essential for determining daily currency values.
Traders claim the Taliban have issued strict warnings, stating that only the central bank has the authority to set exchange rates.
Economic Pressures and Declining Reserves
Observers suggest the Taliban’s inability to inject sufficient dollars into the market stems from limited financial reserves. Critics argue that the group is attempting to assert control over the market through coercion rather than sound monetary policies.
The decline of the afghani comes amid broader economic challenges. The United States has suspended most financial aid to Afghanistan, compounding the strain on the country’s fragile economy.
Experts warn that the afghani’s decline will exacerbate inflation, deepening poverty and hunger across Afghanistan. “This monetary instability, combined with an already shattered economy, will have devastating effects on ordinary citizens,” one economist said.
