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Afghani falls to record low amid pressing currency shortage

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Economists are warning of an acute currency shortage in Afghanistan and the subsequent economic predicament as the Afghani has plummeted to its record low in trading.

The United Nations Development Programme (UNDP) issued a report earlier this week urging prompt actions to prevent the Afghan banking system from collapsing, which is now “in disarray” featuring inadequate liquidity and decreased deposits.

The largest currency exchange market in Kabul now has been crowded with people and the Afghani has dropped to its all-time low.

Before the Islamic Emirate of Afghanistan (IEA)’s takeover of Kabul in mid-August, one U.S. dollar was equal to about 70 Afghanis. But now the exchange rate hovers around 90 Afghanis to the dollar. The continued depreciation of the Afghan currency sparked fears among residents, with many flocking to the exchange market.

“Unfortunately in these two weeks the Afghan currency has been dropping down against foreign currencies with one dollar costing 95.5 Afghanis last week. Then the Afghanistan Bank released a statement that they will put 10 million U.S. dollars into the market, more than the 2.5 million dollars they actually took out. However, the price [of the U.S. dollar] didn’t go down but unfortunately have increased day by day,” said Zirak, spokesman from the all money dealers of Afghanistan.

Zirak said the country’s currency shortage was fueled by the combination of its assets frozen by the United States, the increasing domestic demand for U.S. dollars, as well as banks’ restrictions on dollar withdrawal.

The UNDP report noticed that non-performing loans in Afghanistan had increased from around 30 percent at the end of 2020 to 57 percent in September this year.

With the current trend and withdrawal restrictions, approximately 40 percent of the country’s deposit base will be lost by the end of 2021, said the report.

The currency shortage also comes along with rising prices. Some residents and businessmen in Kabul said that the prices of major commodities, such as food and fuel, have almost doubled compared with last year.

A Kabul resident is calling for the U.S. to release the frozen assets to save people’s lives.

“The U.S. blocked the money of Afghanistan, leading to the economic downturn. The poverty rate has reached its peak and people will die, so we urge the U.S. to release money of Afghanistan because [if not,] sure the people will die,” said Mustafa Bahram.

 

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Pakistan appoints 26 new jirga members for border crisis talks in Afghanistan 

Customs sources have said trade suspension is causing an estimated daily loss of $3 million in bilateral trade

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The Pakistani authorities have appointed a new 26-member jirga to hold further talks in Afghanistan over reopening Torkham border after the first round of talks hit a stalemate last week. 

Torkham crossing was closed almost a month ago when Pakistan border officials opposed the reconstruction and renovation of a security check post on the Afghan side. 

Sources told Pakistan’s Dawn news outlet that the new jirga would consist of 26 members, including experienced and influential tribal elders and local traders who are mostly members of Khyber Chamber of Commerce and Industry.

The source told Dawn talks could resume today, Monday March 17.

Torkham, a key border crossing between Pakistan and Afghanistan in the Khyber District of Khyber Pakhtunkhwa, remained closed for the 24th day on Monday amid rising concerns among traders of both countries who have suffered enormous losses due to the closure. 

The crossing was closed on February 21 after escalation of tensions between the border forces on both sides. During subsequent exchanges of fire, three Afghan soldiers died while eight Pakistani paramilitary troops also sustained injuries.

Customs sources have said trade suspension is causing an estimated daily loss of $3 million in bilateral trade adding that over the first 20 days, approximately $60 million in trade was lost.

Torkham Border Crossing facilitates the daily movement of around 10,000 people to Afghanistan and is a key trade route between the two countries. Over 5,000 trucks, including those carrying perishable goods, are currently stranded, causing heavy financial losses.

 

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Uzbekistan investors show keen interest in mining and construction sectors

The Uzbek Ministry of Investment, Industry and Trade said last month that Uzbekistan and Afghanistan plan to increase the trade turnover to $3 billion.

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Uzbek investors met last week with Afghanistan’s Deputy Minister of Commerce and Industry, Ahmadullah Zahid, and showed an interest in the construction and mining sectors in Afghanistan. The Ministry of Commerce and Industry (MoCI) said in a statement after the meeting that the Uzbek delegation had been assured that Afghanistan was secure and that there are vast investment opportunities in the construction and mining sectors.

Zahid reaffirmed the government’s commitment to supporting both domestic and foreign investors, ensuring a favorable business environment. He also said he hoped the investments would help boost Afghanistan’s economy and further strengthen economic relations between the two neighbouring nations. This comes after Uzbekistan opened a trade center in the northern city of Mazar-e-Sharif early this month.

The trade center provides Uzbek entrepreneurs with a platform to market their goods in Afghanistan.

Trade turnover between Uzbekistan and Afghanistan totalled $153.7 million in January 2025. This is 231 percent more against the same period last year ($46.3 million in January 2024).

The Uzbek Ministry of Investment, Industry and Trade said last month that Uzbekistan and Afghanistan plan to increase the trade turnover to $3 billion.

The latest development comes amid concerted efforts by both countries to boost their cross-border trade relations.

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Afghanistan records trade volume of $292 million via air corridors in 1403 solar year

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Afghanistan’s Ministry of Industry and Commerce says that in the solar year 1403 (April 2024 to March 2025), goods worth $292 million were transported through air corridors.

Abdulsalam Jawad Akhundzada, the ministry’s spokesman, said that the value of exports through air corridors this year totalled $125 million and imports $167 million.

He added that the main export items were dried fruits, saffron, dried and fresh figs, jujubes, pine nuts and handicrafts, and the main import items were medicines and electronic devices.

Akhundzada said that exports happened through Kabul, Kandahar and Mazar-i-Sharif airports to the United States, Germany, China, India, Britain, South Africa, Austria, United Arab Emirates and some other countries.

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