This archive report was first published on 5 November 2021.
November 5, 2021, marked a significant turning point in Afghanistan's economic struggles as the Taliban issued a decree banning the use of foreign currencies in the country.
The move, aimed at promoting the use of the Afghan Afghani, is part of the Taliban's efforts to stabilize the economy, which has been severely impacted by the withdrawal of international financial support.
According to the Taliban, the use of foreign currencies, particularly the US dollar, has been widespread in Afghanistan's markets, with many traders and businesses relying on it for transactions.
However, the Taliban has instructed citizens to refrain from using foreign currency, warning that anyone violating this order will face legal action.
The ban on foreign currencies comes as Afghanistan faces a severe cash crunch, with billions of dollars of the country's overseas assets frozen by the US Federal Reserve and central banks in Europe.
Deputy United States Treasury Secretary Wally Adeyemo stated that while the US maintains sanctions against the Taliban, it is working to find ways for legitimate humanitarian assistance to reach the Afghan people.
Afghanistan's economy has been further strained by the exodus of foreign aid, with grants from overseas previously financing three-quarters of its public spending.
The International Monetary Fund (IMF) has warned that the country's economy could shrink by 30% this year, pushing millions into poverty and causing a humanitarian crisis.
The country is also suffering from a severe drought, which has ruined much of its wheat crop and sent prices soaring.
The United Nations World Food Programme has warned that millions of Afghans could face starvation due to a combination of the drought, conflict, and Covid-19.
