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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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Afghanistan hosts 4th Doha Process Counter-Narcotics Meeting, highlights progress
UNAMA, UN agencies, international organizations and diplomats praised the Islamic Emirate’s efforts, describing the sharp reduction in opium cultivation as a historic achievement.
Afghanistan on Tuesday hosted the fourth meeting of the Counter-Narcotics Working Group under the Doha Process, with participants highlighting significant progress and the need for continued regional and international cooperation.
Hafiz Zia Ahmad Takal, head of public relations at the Ministry of Foreign Affairs, said the meeting was held at the Kabul Grand Hotel and hosted by UNAMA, with participation both in person and online.
The session brought together representatives from the Islamic Emirate of Afghanistan’s ministries of Foreign Affairs, Interior, Agriculture, Irrigation and Livestock, and Public Health, alongside UN agencies, international and regional organizations, the European Union, the Organization of Islamic Cooperation, diplomats and experts.
Takal said Afghan officials reported that opium cultivation has been reduced to near zero following a decree by the Supreme Leader. Representatives outlined achievements, challenges and proposals related to law enforcement, alternative livelihoods for farmers, and treatment programs for drug users.
Officials stressed that while the counter-narcotics measures primarily benefit Afghanistan, their impact extends beyond its borders, making sustained progress dependent on shared responsibility, coordinated investment and mutual trust.
Concerns were also raised over the growing threat of synthetic drugs, with Afghan officials noting that their sources lie outside the country and could pose serious risks to Afghanistan, the region and the wider world.
UNAMA, UN agencies, international organizations and diplomats praised the Islamic Emirate’s efforts, describing the sharp reduction in opium cultivation as a historic achievement.
Participants pledged continued support and called for closer coordination through the Doha Process and bilateral initiatives, with a particular emphasis on alternative livelihoods and expanded treatment for drug users.
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Afghanistan records over 80 deaths, 330 injuries from explosive ordnance in a year
Mohammad Yousuf Hamad, head of information and public relations at the NDPA, said children made up the majority of victims, accounting for 67.5 percent of total casualties.
Afghanistan recorded 193 explosive ordnance incidents over the past year, resulting in 87 deaths and 333 injuries, according to the National Disaster Preparedness Authority (NDPA).
Mohammad Yousuf Hamad, head of information and public relations at the NDPA, said children made up the majority of victims, accounting for 67.5 percent of total casualties.
He noted that mine clearance teams cleared 58 kilometres of contaminated land and neutralised 24,720 mines during the same period.
Hamad added that 155 mine clearance teams are currently operating nationwide, while more than two million people have been reached through explosive hazard awareness programmes.
Despite these efforts, an estimated 106,000 kilometres of land across Afghanistan remain contaminated.
The update follows a warning from the UN Assistance Mission in Afghanistan (UNAMA), which said Afghanistan ranks third globally for casualties caused by explosive ordnance.
UNAMA reported that children account for around 80 percent of victims, many injured or killed while playing near unexploded devices.
UNAMA has called for increased funding for non-governmental organisations involved in mine clearance, stressing that sustained support is critical to protecting vulnerable communities and saving lives.
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Uzbekistan, Pakistan advance Trans-Afghan railway project
The two sides also agreed to adopt a new format for regular commission meetings to improve coordination and accelerate joint projects.
Uzbekistan and Pakistan have agreed to begin fieldwork on the long-planned Trans-Afghan railway project, a key regional connectivity initiative aimed at linking Central and South Asia, according to Uzbekistan’s Ministry of Investment, Industry and Trade.
The agreement was reached during the 10th session of the Pakistan–Uzbekistan Intergovernmental Commission on Trade, Economic and Scientific-Technical Cooperation, co-chaired by Pakistan’s Special Assistant to the Prime Minister for Industries and Production, Haroon Akhtar Khan, and Uzbekistan’s Minister of Investment, Industry and Trade, Laziz Kudratov.
The two sides also agreed to adopt a new format for regular commission meetings to improve coordination and accelerate joint projects.
The railway is seen as a strategic project for landlocked Central Asian states seeking access to global markets, while also offering Pakistan expanded trade routes into Central Asia.
Afghanistan’s role as a transit country places it at the centre of the initiative, with the project expected to generate transit revenue, jobs and infrastructure development.
Uzbekistan, Pakistan and Afghanistan signed a framework agreement on July 17, 2025, to prepare a feasibility study for the railway. The planned 647-kilometre line will follow the Termez–Naibabad–Maidanshahr–Logar–Kharlachi route, linking Uzbekistan to Pakistan’s rail network and providing access to Karachi and other seaports.
The project’s preliminary cost is estimated at $4.6 billion, and its implementation will depend on financing, security conditions and sustained regional cooperation.
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