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Millions in US dollars smuggled into Afghanistan from Pakistan daily
Millions of dollars are being smuggled into Afghanistan from Pakistan every day, providing some support for the fragile economy.
Muhammad Zafar Paracha, general secretary of the Exchange Companies Association of Pakistan, told Bloomberg that traders and smugglers bring as much as $5 million across the border daily, which more than covers the as much as $17 million that Afghanistan’s central bank injects into the market each week.
The illicit cash flows show how the Islamic Emirate of Afghanistan (IEA) is evading sanctions after their 2021 takeover of the country, Bloomberg reported.
For Pakistan, however, it’s contributing to the depletion of foreign reserves and adding to the downward pressure on the rupee as the currency tumbles to record lows and the economy teeters on the edge of collapse.
“Currency is being smuggled without any doubt,” Paracha told Bloomberg. “This has become quite a lucrative business.”
“Afghanistan has about a $10 to $15 million requirement on a daily basis,” said Khurram Schehzad, chief executive officer at Alpha Beta Core Solutions Pvt Ltd., a financial consultancy in Karachi. Half of this is estimated to come from Pakistan, he said.
Da Afghanistan Bank, the country’s central bank, has enough dollars in reserve to support the economy, the bank’s spokesman Haseeb Noori told Bloomberg.
However, some of it comes from the UN, which has been providing about $40 million in humanitarian aid each week since late 2021.
This cash is transported by air to Kabul each week and much of it then needs to be converted into afghani after it arrives. So even though the aid doesn’t directly benefit the IEA, the dollars ultimately end up in the central bank’s coffers, Bloomberg reported, adding that the UN wasn’t immediately available to comment.
According to the report, the afghani has gained about 5.6% against the US dollar over the past year through Monday, one of the strongest performances of any currency in the world.
This while Pakistan’s rupee has lost about 37% against the US currency over the same period, one of the largest declines. It fell about 10% in one day in late January, the biggest drop in at least two decades, as the crisis-stricken government relaxed its grip over the exchange rate in a bid to win much-needed loans from the IMF, Bloomberg reported.
However, according to Bloomberg, the smuggling of US dollars into Afghanistan really took off in the middle of last year after Afghanistan increased coal exports to Pakistan.
In addition, it has been boosted by the IEA’s ban on the use of Pakistan’s rupee as legal tender in Afghanistan, which forces exporters to trade in dollars and bring the US currency back to the country, the officials told Bloomberg.
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Islamic Emirate’s army now self-sufficient, says chief of army staff
Mohammad Fasihuddin Fitrat, Chief of General Staff of the Armed Forces, says that over the past four years, the army forces of the Islamic Emirate have shown no hesitation in defending and protecting Afghanistan, and that today the country’s army is standing on its own feet.
According to a statement from the Ministry of Defense, Fitrat made these remarks at a meeting with media representatives, political analysts, and a number of government officials aimed at coordination and strengthening cooperation. He added: “Nations that cannot stand on their own feet and rely on others, even if they grow, will not be capable of achieving real progress.”
Fitrat also expressed appreciation for the role of the media in ensuring security and in supporting the country’s defense forces, stating: “We and you, as citizens of this land, must put our hands together and build the country together, take pride in our forces, and strive with all our strength for the country’s development. We have created an army that defends honor, territorial integrity, and the borders of the country, and serves as the guardian of our freedom.”
He emphasized that the Islamic Emirate is working to establish an army equipped with modern weapons so that it can defend the country’s territory under all circumstances.
He stated that the country’s army has proven to the people that anyone who looks at this land with ill intent will face a firm and courageous response, and that it has also been made clear to neighboring countries that any aggression against Afghanistan will be met with a response several times stronger.
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Afghan health minister attends second WHO summit in India
Noor Jalal Jalali, the Minister of Public Health of the Islamic Emirate, participated in the second World Health Organization meeting on traditional medicine during his official visit to India.
In a statement issued on Thursday, the Ministry of Public Health said that the meeting was held in India with the participation of representatives from around 100 countries, health ministers from 23 countries, professional experts from various nations, and officials from different departments of the World Health Organization.
During the meeting, discussions were held on the standardization of traditional medicine, training of individuals active in this field, recognition of traditional medicine as an established reality, and the sharing of countries’ experiences in this area.
The ministry stated that the purpose of participating in the conference was to standardize traditional medicine in Afghanistan, adding that for several decades this sector has been practiced in a non-standard manner and without a defined curriculum or clear principles.
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Afghanistan and Kyrgyzstan boost trade and digital finance ties
Minister Sydykov, in turn, pledged the continuation of Kyrgyzstan’s humanitarian assistance to Afghanistan and highlighted his country’s interest in working together on e-governance initiatives.
Afghanistan’s Deputy Prime Minister for Administrative Affairs, Abdul Salam Hanafi, has met with a high-level Kyrgyz delegation led by Minister of Economy and Commerce Bakhyt Sydykov to discuss expanding bilateral trade and strengthening cooperation in digital financial services.
During the meeting, Hanafi reaffirmed Afghanistan’s readiness to deepen ties with Kyrgyzstan, stressing the importance of developing electronic administration systems and modern banking channels to facilitate trade and financial transactions between the two countries.
Minister Sydykov, in turn, pledged the continuation of Kyrgyzstan’s humanitarian assistance to Afghanistan and highlighted his country’s interest in working together on e-governance initiatives. He also pointed to potential cooperation in areas such as the printing of securities and the development of electronic payment systems.
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