Afghan currency plunges to record low against dollar

Afghan currency plunges to record low against dollar
2 min read
13 December, 2021
The Afghan currency continues to plummet as the country's population reel under a worsening economic and humanitarian crisis
The afghani has lost a value of over 30 percent in the last week [Getty- archive]

Afghanistan's currency dived to a record low against the US dollar on Monday, taking its losses over the last week to 30 percent as an economic collapse and humanitarian crisis grip the country.

There has been an enormous shortage of dollars since the Taliban seized power in August as international donors suspended billions in aid provided annually to the previous US-backed regime.

Afghanistan's Money Exchange Commission said it has urged the central bank to intervene in the market to shore up the afghani, which sagged to 130 against the dollar in Monday trade, down from around 100 a week ago.

"We asked them to interfere in the market and distribute dollars," said Haji Zeerak, a spokesman for the commission.

Since the Taliban takeover, the central bank has been cut off from nearly $10 billion in reserves it held overseas, mainly in the United States.

The afghani's depreciation began gathering pace early last week, propelled by market fears that a major bank might collapse.

Banks have placed severe restrictions on customer withdrawals, rocking confidence in the financial system.

The country's cash crunch has fed into an economic collapse that has left it facing a deepening humanitarian crisis.

Many people in the capital Kabul have resorted to selling personal items to feed themselves.

"I have sold my gold jewellery to have some dollars for the expenses of our house," said housewife Khalida, lamenting a surge in prices for cooking oil and flour.

More than half of Afghanistan's 38 million people face "acute" food shortages, according to the United Nations, with the winter forcing millions to choose between migration and starvation.