Business
IMF, Afghanistan reach preliminary agreement over Extended Credit Facility
The International Monetary Fund (IMF) and the Afghanistan authorities have reached a preliminary agreement on an economic reform program to be supported by a new three-and-half year US$364 million Extended Credit Facility (ECF).
This announcement comes just three months before the United Nations’ donor pledging conference for Afghanistan gets underway.
In a statement issued by the IMF on Friday, the fund said the ECF will help mitigate the economic impact of the Covid-19 pandemic, maintain macroeconomic stability, and underpin reforms for economic resilience and good governance.
The fund also stated that continued financial assistance from international partners is critical to support objectives of Afghanistan’s National Peace and Development Framework for 2021-25, including inclusive growth, poverty reduction, and self-reliance.
Leading the IMF’s team was Azim Sadikov, and virtual discussions were held with Afghan officials through July and August on the country’s economic reform program.
Sadikov said however that the agreement is subject to the approval of the IMF’s Executive Board, which would possibly consider the agreement in October after preliminary conditions have been met by Afghan authorities, including the improvement of accountability and transparency in procurement processes.
“The new ECF arrangement will support authorities’ reform program to maintain macroeconomic stability and lay the ground for a sustained post-pandemic economic recovery while continuing to advance structural reforms,” Sadikov said.
He said the reform program aims to gradually reverse the fiscal decline due to the pandemic and instead create space for development sending while increasing self-reliance.
He stated improvements in customs collections and revenue administration need to be improved and the planned Value Added Tax (VAT) process needs to be implemented in 2022.
“Monetary policy will continue to focus on maintaining price stability and a flexible exchange rate regime, while fostering confidence in the Afghani,” Sadikov said.
He also said that reforms, in accordance with the new ECF arrangement, will focus on addressing issues that hamper economic growth and resilience.
“To that end, the program will aim to improve fiscal governance, strengthen the anti-corruption regime, and bolster the financial sector,” he said.
“Bolstering the financial sector, including by completing the reform of state-owned banks, will also be important to boost its capacity to contribute to growth.
“Coming before the November pledging conference, the ECF arrangement is expected to catalyze donor financing, which is critical to support Afghanistan’s reform and development objectives under the multi-year National Peace and Development Framework,” he said.
The pledging conference is organized every four years and was last held in 2016 in Brussels.
This year, Finland will host the conference, which will be organized by both the UN and Afghanistan.
Previous international financial commitments largely end by December of this year.
Business
‘Made in Afghanistan’ expo opens in Tashkent
The Afghanistan Chamber of Commerce and Investment has announced that a major exhibition of Afghan products titled “Made in Afghanistan” is opening today (Wednesday) in Uzbekistan’s capital Tashkent.
According to the chamber, the expo—supported financially by the United Nations Development Programme—will run until Friday and aims to showcase Afghanistan’s production and export potential.
More than 60 booths have been set up by Afghan traders, featuring a wide range of products including carpets, dried and fresh fruits, saffron, pine nuts, cotton, precious and semi-precious stones, as well as beverages.
Officials from the chamber expressed hope that the expo will help expand trade relations between Afghanistan and countries in the region, particularly Uzbekistan.
Business
Afghani strengthens nearly 10% against US dollar amid banking sector reforms
The bank said it has expanded oversight of financial institutions and private lenders, improving transparency and promoting more consistent standards across the sector.
Afghanistan’s central bank, Da Afghanistan Bank, says the national currency has appreciated by 9.93% against the US dollar during the year 1404, citing steady progress in the country’s financial and banking systems.
Officials attributed the gains to cautious monetary policies that have helped stabilise the Afghani against major global currencies while also boosting its value against the dollar.
The bank said it has expanded oversight of financial institutions and private lenders, improving transparency and promoting more consistent standards across the sector.
As part of efforts to better manage liquidity, authorities also collected and destroyed worn-out banknotes in circulation. At the same time, officials reported growth in electronic banking, with digital payment usage rising in recent months.
Central bank spokesperson Haseebullah Noori said initiatives are underway to broaden access to banking services nationwide, including the wider rollout of Islamic banking options.
Analysts welcomed the stabilisation efforts but stressed the need to address ongoing challenges facing domestic banks, including the impact of international financial sanctions on Afghanistan.
They added that expanding Islamic banking could help draw more savings into the formal financial system, noting that a significant share of personal wealth remains outside banks. Bringing those funds into the sector, they said, could inject billions of Afghanis into the economy and further support financial stability.
Business
Uzbekistan delivers over 290 tons of aid to Afghanistan
The assistance, provided ahead of Eid al-Fitr, is intended to support vulnerable communities while reinforcing ties between the neighboring countries.
Uzbekistan has delivered more than 290 tons of humanitarian aid to Afghanistan, according to the country’s Ministry of Foreign Affairs.
The assistance, provided ahead of Eid al-Fitr, is intended to support vulnerable communities while reinforcing ties between the neighboring countries.
The shipment includes essential food supplies such as flour, rice, wheat, vegetable oil, instant meals, pasta, and confectionery. An official handover ceremony was held in the border town of Hairatan.
Local officials, including Balkh province representatives and authorities from Hairatan, expressed appreciation for the continued support, acknowledging Uzbekistan’s efforts to assist the Afghan people.
Among those present at the ceremony were Uzbekistan’s Ambassador to Afghanistan, Oybek Usmanov, and Surkhandarya regional governor Ulugbek Kosimov.
The aid delivery underscores Uzbekistan’s ongoing humanitarian engagement and its broader efforts to promote regional cooperation and stability.
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