Commodity prices unyielding in Kabul despite Afghani’s dollar gain

A shopkeeper in Balkh province, north of Afghanistan. FILE PHOTO

Despite a significant drop in the value of the dollar against the Afghan currency over the past two years, Kabul residents expressed frustration as commodity prices remain unchanged, exacerbating the challenges faced amid increasing poverty.

As reported by the Taliban-run National Television on Tuesday, the value of one dollar reached 70.56 Afghanis, a gradual reduction from nearly 90 Afghanis two years ago.

Market experts highlighted that since commodities are purchased through traders using dollars, market prices are influenced accordingly.

Residents had anticipated a reduction in commodity prices with the decline in the dollar value against the Afghani, but prices persist. Shopkeepers currently sell a 49-kilogram sack of flour for 1,650 Afghanis and a sack of rice for 2,800 Afghanis.

Ahmadzai, a Kabul resident, commented, “The fluctuation of the dollar does not benefit us. The prices of essentials like flour, rice, and oil should decrease because people are struggling financially.”

“We earn in Afghanis and purchase food items in Afghanis. Nothing has become more affordable,” Khalid, another resident, expressed.

Money changers noted an increased demand for Afghan currency, leading to its enhanced value compared to other currencies.

“In the past week, the US dollar, which was exchanged for 72 Afghanis, suddenly dropped to 67 Afghanis and 66.5 Afghanis (on Monday, Nov. 13),” Najibullah, a Kabul money exchanger, stated. “The reason for the increase in the value of Afghani is the lack of liquidity in the market, and the fall in the value of foreign currencies in the region.”

While economic experts attribute the Afghani’s value surge to a lack of liquidity in the market the Taliban-run central bank assures it has ample Afghani banknotes in reserves and monitors the market regularly.

“We assure our compatriots that Afghanistan has enough Afghan money to inject into the market, considering the monetary indicators. Additionally, this bank consistently monitors the market,” Hasibullah Nouri, Taliban spokesman for the Central Bank, said.

In September, Bloomberg reported the Afghani currency as the world’s fastest-growing, an unusual occurrence for a country grappling with poverty and a severe human rights record.