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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 leader urges Kabul University graduates to uphold Islamic values
Islamic Emirate leader Sheikh Hibatullah Akhundzada has urged Kabul University graduates to uphold Islamic values and Sharia laws under all circumstances and not abandon their religion.
A Ministry of Higher Education official read out Akhundzada’s message on Wednesday at a graduation ceremony for around 2,500 students from Kabul University.
In his message, Akhundzada called on graduates to respect their parents and teachers and to uphold piety, sincerity, honesty and trustworthiness in their daily lives.
He also urged university teachers to provide students with proper religious, intellectual, moral, academic and professional education, promote unity and focus on their moral development.
According to the Ministry of Higher Education, around 2,500 students graduated in 2026 from 80 departments across 22 faculties of Kabul University.
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US State Department: Afghanistan fails to meet minimum fiscal transparency standards
The U.S. Department of State says Afghanistan’s ministries and other public-sector institutions failed to meet any of the minimum requirements for fiscal transparency during the review period.
In its 2026 Fiscal Transparency Report, released Tuesday, the State Department said no Afghan entity had published an executive budget proposal or an end-of-year report within a reasonable timeframe.
The report said that in the absence of a publicly available budget, there was no confirmation of government expenditures made to support public services. It also said Afghan institutions had not published timely information on public-sector debt obligations.
According to the report, publicly available revenue and expenditure figures did not correspond to actual revenues and expenditures, based on information gathered through contacts and the government’s inability to service public-sector debts.
However, some state-owned enterprises independently published information on their revenues and expenditures.
The State Department also said an entity calling itself the Supreme Audit Office, which announced that it would begin operating in 2022, had not clarified the legal basis for its activities and did not publish any audits or audit findings during the review period.
The report further noted that the IEA did not make public the budgets of their “military” and intelligence services.
The U.S. State Department recommended that Afghan ministries and public institutions improve fiscal transparency by publishing reliable budget documents on time, following internationally accepted budgeting principles, strengthening oversight of off-budget accounts, and making information on public-sector debt publicly available.
It also called for clearer laws governing natural-resource extraction and public procurement, as well as ensuring that any supreme audit institution operates independently and meets international standards.
Meanwhile, the Islamic Emirate’s spokesperson, Zabihullah Mujahid, said Afghanistan’s budget does not belong to any other country, and therefore there is no obligation to provide information to others about how it is spent.
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FAO warns water shortages and heat put Afghanistan’s agriculture under pressure
FAO assessed current conditions and prospects using climate forecasts, remote-sensing data and consultations with farming communities across all 34 provinces.
The Food and Agriculture Organization of the United Nations (FAO) has warned that water shortages and above-average temperatures are placing increasing pressure on summer crops and grazing across Afghanistan.
In its August 2026 outlook for Afghanistan’s 2026/27 agricultural season, FAO assessed current conditions and prospects using climate forecasts, remote-sensing data and consultations with farming communities across all 34 provinces.
The agency said persistent water shortages, combined with high temperatures, are affecting agricultural conditions during the summer season and increasing pressure on crops and livestock.
FAO also warned that persistently high fertilizer prices could limit farmers’ ability to invest in the upcoming winter wheat season, potentially affecting production prospects.
Looking ahead, the report says a strengthening El Niño and the possible development of a positive Indian Ocean Dipole could bring above-average precipitation during winter and spring.
Such conditions could improve water availability and boost prospects for agricultural production, but FAO cautioned that heavier rainfall could also increase the risk of floods, landslides, crop damage and livestock losses.
The agency said the latest outlook highlights the need for continued monitoring, anticipatory action and timely, practical climate and agricultural advisories to help farmers and livestock owners prepare for changing conditions.
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