The use of foreign currencies has been banned by the Taliban in Afghanistan. This step could further disrupt an economy on the edge of downfall.
“The economic situation and national interests in the country require that all Afghans use Afghani currency in their every trade,” the Taliban said.
Afghanistan’s economy is besieged due to the removal of international financial support after the Taliban took control.
Generally, the US dollar was been used extensively in Afghanistan’s markets.
Dollars are also frequently used for trade in the neighbouring areas of Afghanistan, including Pakistan.
“The Islamic Emirate instructs all citizens, shopkeepers, traders, businessmen and the general public to henceforth conduct all transactions in Afghanis and strictly refrain from using foreign currency,” Taliban spokesman Zabihullah Mujahid said in a statement posted online.
He further added: “Anyone violating this order will face legal action.”
Afghanistan’s assests frozen
It happened in August that the Taliban seized control of the country. Afghanistan’s overseas assets worth billions of dollars were frozen by the US Federal Reserve and central banks in Europe.
“We believe that it’s essential that we maintain our sanctions against the Taliban but at the same time find ways for legitimate humanitarian assistance to get to the Afghan people. That’s exactly what we’re doing,” Deputy United States Treasury Secretary Wally Adeyemo told the US Senate Banking Committee last month.
However, the Taliban has called for the release of these overseas assets.
Afghanistan has also been hit by the flight of foreign aid. Fundings from overseas previously financed three-quarters of its public spending.
At the beginning of this year the IMF – International Monetary Fund said the country will no longer be able to access its resources, while the World Bank also paused funding for projects there.
The previous month, the IMF cautioned that Afghanistan’s economy could shrink by 30% in 2021. Hence, pushing millions into poverty and causing a humanitarian crisis.
The fund also said that Afghanistan’s economic despairs could lead to a refugee crisis affecting neighbouring countries, Turkey and Europe.
Apart from that, the country is also going through a severe drought which has ruined much of its wheat crop and sent prices spiralling.