At the beginning of 2020, the afghani had traded at some 76 for one dollar, and at 77 in this January, 81 in July and 90 in mid-August….reports Asian Lite News
Amid the ongoing humanitarian crisis in Afghanistan, the national currency, the afghani, has recorded an alarming drop against the US dollar leading to a sharp increase in the prices essential items like food and fuel.
The afghanitraded at 112.60 for one US dollar on Monday, according to figures provided by Da Afghanistan Bank, the country’s national bank.
On Sunday, the exchange rate was 106.12 while the rate was 103.66 a day before, a continued record devaluation, reports Xinhua news agency.
At the beginning of 2020, the afghani had traded at some 76 for one dollar, and at 77 in this January, 81 in July and 90 in mid-August.
After the Taliban’s takeover in August, the Afghan economy has suffered from the US freezing of over $9 billion in assets belonging to the Afghan central bank, and a halt in funds by the World Bank and the International Monetary Fund.
According to economists and banking analysts, this is the most that the Afghani has lost value against a foreign currency in recent times, TOLO News reports.
They said currently inflation has reached to 12 to 14 per cent, and the persistence of this situation will destabilise the economy of the country.
According to them, this situation can damage small and medium investments in the country and will halt business activity.
Shopkeepers said some wholesalers on Monday closed their markets as the news about the rapid increase of the dollar value spread throughout the city.
Meanwhile, the Afghan central bank has announced that the third batch of cash assistance from the World Bank has arrived as part of the global lender’s humanitarian pledges to the war-torn nation, the media reported on Monday.
In a statement on Sunday, the De Afghanistan Bank said the assistance worth $19.2 million was was given to the Kabul-based Afghanistan International Bank (AIB), which is the largest bank in the country and the only one with international transfer to all other nations, Khaama Press reported.
The cash assistance comes at a time when the local currency (Afghani) is in its unprecedentedly lowest value. On Sunday, one US dollar amounted to 114 Afghanis.
The Khaama Press said that the fresh batch of cash will help stabilise the Afghani.
On Friday, the World Bank allowed $280 million to be transferred to Afghanistan so that it be used in health and food sectors by World Food Programme and the Unicef.
The next day, the US State Department announced that they have made a regulation based on which people will be allowed to transfer money to Afghanistan, as well as lift sanctions on all those who are involved in the transfer.
MoneyGram and Western Union are the only means of money transfer to Afghanistan that resumed their operations in September.
Since the August 15 takeover of Afghanistan by the Taliban and the formation of the Taliban-led caretaker government on September 7, the country’s humanitarian situation has worsened.
In response, world governments cut off Afghanistan’s access to international funding and froze the central bank’s roughly $10 billion in assets held abroad, in a bid to stop Taliban from accessing that money.
According to UN estimates, some 23 million people are in desperate need of food, the $20 billion economy could shrink by $4 billion or more and 97 per cent of the 38 million population are at risk of sinking into poverty.