Afghan National Currency Crashes to new Low against US dollar
The value of Afghanistan’s national currency collapsed unprecedentedly on Tuesday morning as one US dollar was exchanged for over 100 Afghanis.
The increase in the value of the US dollar against the Afghani directly affects the lives of the Afghan people, soaring the prices of raw materials in the markets as all imports are being done in the US dollar.
This comes as poverty and hunger tighten the grip on Afghanistan. The Afghan state is teetering on the edge of full collapse, as the UN warns that the country is fast becoming the world’s worst humanitarian disaster.
After the fall of the Islamic Republic, Afghan Central Bank’s reserves in foreign banks have been frozen and Afghanistan is currently facing a liquidity crisis.
The International Crisis Group has recently suggested in a report that the U.S. government and its allies should find ways of injecting liquidity into Afghan currency markets. Ideally, Washington would greenlight the phased return of frozen reserves to the Afghan central bank (Da Afghanistan Bank), releasing an initial tranche on a trial basis to monitor for unintended effects.
According to the crisis group, this step would allow the central bank to regulate the Afghan currency and run U.S. dollar auctions.
The value of the Afghan national currency fell from 85 afghanis to 90 afghanis against the dollar in an unprecedented drop and then hit 95 afghanis. In the third wave, one dollar is now being exchanged for 100 afghanis.
