Taliban Bans Use of Foreign Currency Amid Economic Woes in Afghanistan

Afghanistan, which had long relied on foreign aid, was cut off from it soon after the Taliban* seized power in the middle of August, due to the movement being considered a terrorist organisation in most countries.

The use of foreign currencies in Afghanistan will be banned as a response to the country's current economic troubles, a Taliban* spokesman has announced.

"The economic situation and national interests in the country require that all Afghans use Afghan currency in their every trade", the Taliban announced.

As the country faces economic crisis and the Taliban-controlled central bank struggles to change the situation, the population has widely resorted to the use of US dollars as a means of trade and payment, as well as the currencies of neighbouring countries, such as the Pakistani rupee.

Economic woes struck the country soon after the Taliban seized the capital and the rest of the nation in the middle of August 2021. People had trouble getting their hands on cash or withdrawing it from bank accounts as the central bank had imposed restrictions, while companies often could not receive wires from abroad and fulfil their international obligations.

Over the 20 years that NATO forces were deployed in the country, the latter largely relied on foreign economic aid to maintain economic stability. However, this aid was suspended as soon as the Taliban came to power, due to it being regarded a terrorist organisation. In addition, the US cut the Afghan central bank off from its reserves stored in US banks for the same reason.

In addition, foreign companies are facing trouble wiring funds to their counterparts in Afghanistan amid banks' concerns over their potential ties to the country's new authorities, the Taliban. Such transactions might be regarded as terrorist financing and thus prompt sanctions from the respective countries' authorities.

*The Taliban is a terrorist organisation banned in Russia and many other countries