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Foreign cash aid and tight restrictions on afghani helps ‘stabilize’ local currency

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Billions of US dollars, flowing into Afghanistan, in the form of cash aid, is helping to stabilize the local currency so much that the AFN has been propelled to the top of the global rankings this quarter.

According to America’s Bloomberg news agency, the afghani (AFN) has maintained its value against foreign currencies, especially the US dollar, on the back of the cash aid and other factors.

Additional actions are also helping to stabilize the currency including the Islamic Emirate’s ban on the use of Pakistani rupees and US dollars on the local market, and an increase in cross border trade, Bloomberg reported.

Currently, the AFN is trading at just under 80 afghanis to the dollar.

The international community has shipped in on over $40 million dollars a week since the fall of the former government. This money is handled by the UN and used for aid in the country.

Bloomberg reported however that the cash aid and increased trade with Afghanistan’s neighbors has propelled Afghanistan’s currency to the top of global rankings this quarter — an unusual spot for a poverty-stricken country.

The IEA’s tight restrictions on taking dollars out of the country, banning online trading and imposing prison sentences on those who break the rules, have also contributed to this stability, Bloomberg reported.

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Afghanistan, Iran explore expansion of trade and transit via Chabahar Port

Officials described the visit as part of ongoing efforts to strengthen regional cooperation and establish reliable, cost-effective transit corridors for Afghan exports and imports.

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The Ministry of Industry and Commerce of the Islamic Emirate of Afghanistan says a technical delegation has completed a visit to Iran to assess transit and trade opportunities, emphasizing the expansion of commercial activity through the strategic Chabahar Port.

Abdul Salam Javad Akhundzada, the ministry’s spokesman, told Afghan Voice Agency (AVA) that the delegation examined Iran’s major transit routes, including the ports of Chabahar and Bandar Abbas, and held meetings with Iranian officials to discuss ways to strengthen trade connectivity between the two countries.

According to Akhundzada, the Afghan team conducted a comprehensive review of port operations, transit facilities, and transportation infrastructure, with its findings shared with Industry and Commerce Minister Nooruddin Azizi.

Azizi praised the delegation’s efforts and reiterated Kabul’s commitment to improving regional trade and logistics. “We are working seriously to expand trade routes and create greater facilities for Afghan traders,” he said, noting that leveraging regional transit opportunities remains a priority for Afghanistan’s economic development.

Officials described the visit as part of ongoing efforts to strengthen regional cooperation and establish reliable, cost-effective transit corridors for Afghan exports and imports.

The renewed focus on Chabahar—seen as a vital alternative to Pakistan’s ports—comes amid the continued closure of key Afghan-Pakistani border crossings due to recent security tensions.

Khan Jan Alokozai, a board member of the Afghanistan Chamber of Commerce and Investment, told AVA that the closures have disrupted trade flows through Pakistan, particularly at Karachi port. He urged that “trade and economic issues should be kept separate from political disputes” to ensure stability in regional commerce.

However, Alokozai added that if tensions with Pakistan persist, Afghanistan will prioritize alternative routes through Iran and Central Asia, including expanding cooperation via Chabahar, which provides access to global markets through the Arabian Sea.

The Chabahar Port, developed with Indian assistance, has long been viewed as a key regional hub offering landlocked Afghanistan a direct maritime link bypassing Pakistan.

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Ariana Airlines slashes cargo fees to boost Afghanistan’s trade

Ariana Airlines has been directed to acquire a dedicated cargo aircraft as soon as possible.

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In a significant development aimed at facilitating trade, the Economic Deputy of the Office of the Prime Minister, Mullah Abdul Ghani Baradar, announced new measures regarding cargo transport costs using Ariana Airlines.

Under the new decision, the cost of transporting export goods via Ariana Airlines has been reduced to $1 per kilogram, while the fee for importing commercial goods has been set at $0.80 per kilogram.

The Economic Deputy has also instructed the Ministries of Finance, Transport, and Civil Aviation to provide a 90 percent discount on their service fees for Ariana Airlines, further supporting the company’s operations.

In addition, Ariana Airlines has been directed to acquire a dedicated cargo aircraft as soon as possible to increase its capacity for transporting both export and import goods, thereby streamlining trade operations across the country.

Officials say these measures are expected to have a positive impact on Afghanistan’s economy, enhancing trade efficiency, boosting exports, and improving access to imported goods.

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Another US sanctions waiver for Iran port boosts India’s Afghanistan plan

According to reliable sources, the existing waiver expired on Tuesday, but following intensive negotiations, India succeeded in obtaining an extension from Washington.

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India has secured an extension of the US sanctions waiver for Iran’s Chabahar Port until early next year — a move that strengthens New Delhi’s regional connectivity strategy by providing a crucial gateway to Afghanistan, Central Asia, and parts of Eastern Russia.

According to reliable sources, the existing waiver expired on Tuesday, but following intensive negotiations, India succeeded in obtaining an extension from Washington. Indian officials emphasized the port’s strategic importance for the effectiveness of its regional connectivity and humanitarian initiatives.

Economic Times (ET) had earlier reported that New Delhi was seeking the extension after previously receiving a waiver valid until October 28. The US had initially planned to revoke the exemption by September 29 before allowing India to continue its operations under the renewed waiver.

In May 2024, India signed a 10-year agreement to operate the Chabahar Port with Iran’s Port and Maritime Organisation through Indian Ports Global Limited. The port has been central to India’s efforts to expand economic and humanitarian cooperation with Afghanistan, including the recent delivery of ambulances gifted during the Afghan foreign minister’s visit to New Delhi earlier this month.

The Islamic Emirate has also expressed interest in effectively utilizing the port to enhance its international engagement and trade access.

There are ongoing plans to link Chabahar Port with the International North-South Transport Corridor and with Central Asian nations. Uzbekistan — the world’s second doubly landlocked country after Liechtenstein — supports the initiative as part of its multipolar connectivity vision and seeks to diversify beyond China’s Belt and Road Initiative.

Sources further indicated that Russia, too, is exploring ways to use the Chabahar Port through Kazakhstan and Uzbekistan to facilitate trade with India and other Asian markets.

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