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Afghani makes sharp gains against rupee, dollar

Afghani makes sharp gains against rupee, dollar

Aug 03, 2016 - 19:36

KANDAHAR (Pajhwok): Following a ban on the usage of Pakistani currency by central bank officials and the police headquarters, the value of the afghani has witnessed an unprecedented rise against the rupee and dollar in southern Kandahar province.

A few days ago, the central bank officials in Kandahar said almost all deals in the southern zone encompassing Kandahar, Helmand, Uruzgan and Zabul provinces happened in the Pakistani currency, affecting the value of the afghani.

The bank officials informed the people that they had launched efforts to ban domestic transactions in the Pakistani currency and a ban has been imposed in Spin Boldak border town.

Through a statement, the central bank in Kandahar warned people of fines and legal action if they used the Pakistani currency. Similarly, Kandahar police chief Gen. Abdul Raziq has also called on people to avoid using the rupee.

On Wednesday, sources at the Kandahar Money Market said the afghani had made sharp gains against the rupee and dollar and the afghani continued to appreciate.

Moneychangers Union head in Kandahar Haji Qandi Agha said 1000 afghanis were exchanged for 1800 rupees and one US dollar for 62 afghanis.

He said a few days ago 1000 afghanis accounted for 1620 rupees and one US dollar cost 69 afghanis.

He said the afghani had greatly appreciated against the foreign currencies during the past few days and hoped the afghani would continue to make gains against the rupee and dollar.

Haji Qandi Agha linked the afghani’s sharp appreciation against the two foreign currencies to the ban on the Pakistani currency in southern provinces. He said people’s cooperation to use the afghani instead of the rupee was essential.

“Today hundreds of people from Kandahar’s various districts arrived to the money market to change the Pakistani currency into the afghani,” he said.

He said previously the money market would open at 12pm, but today it was open at 9am, with those surrendering the rupees were unable to find space.

Hundreds of people coming from various districts, particularly from Spin Boldak, arrived at the money exchange market to change the rupees into afghanis.

They said they had decided to convert the rupees into afghanis following the ban on transactions in the Pakistani currency.

Haji Mohammad Rasool, a trader from Spin Boldak, who visited the money exchange market to change the rupees into the afghanis, said his decision to buy the afghanis came in response to the ban.

“I would purchase common goods in the rupee and would sell them in the rupee as well, but now I will not keep the foreign currency with myself.”

He said it was common to use the Pakistani currency in Spin Boldak and he also had no option.

The trader said he would not only himself avoid the use of rupee but would also encourage other people to do so.

Economic experts believe if the afghani stabilizes to a certain extent against the rupee, it would be good news for the country’s economic development.

Expert Abdullah Ziarmal said the appreciation of the afghani against foreign currencies had many economic benefits including economic development and balanced trade.

He said if the afghani was kept appreciating against foreign currencies, it would increase people’s demand for the local currency and investments would be done in the afghani.

The expert said there was no specific currency used in procurement deals, but if the value of the afghani was further increased and the afghani gained stability, the procurement process would also be done in the afghani.

But he expressed his fear that some countries often deliberately devaluated their currencies for a short period of time to get maximum profit.

He said Afghanistan had recently made attempts to reduce reliance on Pakistan in areas of trade and imports.

It was possible Pakistan might take advantage of the situation and encourage Afghan traders to buy goods in the depreciated rupee in Pakistan and import them to Afghanistan, he said.

“It will help gradually appreciate the rupee, which is a dangerous situation from economic perspective.”

The expert insisted central bank officials and members of the Afghanistan Chamber of Commerce and Industries should avoid taking steps that endangered the stability of the afghani.

In Kabul, the main money exchange market through Facebook said the afghani had appreciated a lot following the ban on the rupee in southern provinces.

The market officials urged the countrymen to wage a widespread campaign stressing the use of only and only the afghani in domestic transactions.


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