Taliban’s ban usage of foreign currency in Afghanistan

Another drastic step taken by the Taliban forced Afghanistan into a financial crisis. The Taliban imposed a complete ban on the use of foreign currency in Afghanistan. The Taliban government's decision on currency in Afghanistan in a surprise move that could further weigh on the struggling economy. The government has instructed all citizens, shopkeepers, traders, businessmen, and the general public to use their own currency Afghanis for all transactions. Legal action will be there against people who violated the legislation. The latest move is likely to further disrupt the nation’s economy on the brink of collapse.

Taliban dared to take such a drastic step when foreign aid in the war-torn country is drying up. The usage of the US dollar and Pakistan currency is widespread across Afghanistan’s trade and marketing. Pakistan rupee is easily exchangeable in border areas for trading. Taliban felt the reason for the usage of foreign currency in Afghanistan has a negative effect on the country’s economy. Since the group took over Kabul in August, Afghanistan’s currency has depreciated and the country’s reserves are frozen abroad. The ban is likely to complicate the process of receiving humanitarian aid from other nations.  

The International Monetary Fund (IMF) has blocked Afghanistan from accessing its reserves after the Taliban came into power. The World Bank has halted funding for projects in Afghanistan which resulted in a massive cash crunch. Western nations were stopped their aid on development projects in the country. The Taliban has been forced the release frozen reserves by the US and other nations. Meanwhile, a severe drought has ruined much of Afghanistan's wheat crop, leading to inflation. IMF has warned that Afghanistan’s economy might shrink by 30% by the end of this year and would push millions of people into poverty.