Afghanistan central bank to sell $10 million to support currency

Afghanistan central bank to sell $10 million to support currency
2 min read
15 November, 2021
Afghanistan's central bank said it will sell millions of US dollars through an auction to support the local currency as the country sinks into economic disaster
With the abrupt withdrawal of foreign support following the Taliban victory in August, Afghanistan's economy has gone into freefall [AFP/Getty]

Afghanistan's central bank said it would sell 10 million USD through an auction to banks and foreign exchange dealers on Tuesday as it seeks to support the afghani currency from a sharp fall in recent days.

With the abrupt withdrawal of foreign support following the Taliban victory in August, Afghanistan's economy has gone into freefall, putting a severe strain on the banking system which has set weekly withdrawal limits to stop a bank run.

Some 9 billion USD in central bank reserves held outside the country have also been frozen by the United States, despite growing calls for them to be released to help ease the financial squeeze that is strangling the economy.

According to a money exchanger in the main Sarai Shazada exchange, the afghani was quoted at 93.80 to the dollar. That compared with a price of 91.20 four days ago.

The central bank invited eligible banks and foreign exchange dealers to bid in the sale. It said all successful bids had to be cleared in full by the end of the day.

"We assure our esteemed compatriots that the functioning of the country's banking system will soon return to normal and that the stability of the afghani will be maintained," the central bank said in an announcement.

(Reuters)