Afghanistan Faces Severe Economic Crisis Under Taliban Rule as Currency Depreciates

Kabul: Afghanistan’s financial and economic situation has plunged into a deep crisis following the Taliban’s rise to power. In recent months, the sharp rise in the value of the US dollar and the depreciation of the Afghan currency have raised widespread concerns.

In an effort to address the crisis, the Central Bank of Afghanistan (DAB) announced on August 30 that it would sell $20 million in a currency auction. This move comes after the suspension of US foreign aid and the ongoing decline in Afghanistan’s currency value.

To ease the pressure on the dollar, DAB has invited currency exchangers and commercial banks to participate in the auction. Successful bidders are required to make full payments by the end of the business day, as partial payments will not be accepted.

Earlier, on August 17, DAB had conducted a similar auction, selling $25 million to stabilize the currency. The bank has instructed all money changers and commercial banks to settle their accounts by the end of the auction day.

According to DAB, the current exchange rate is 73.58 Afghanis per US dollar. On January 24, following an executive order by President Donald Trump, all foreign aid to Afghanistan was suspended for 90 days, causing the Afghan currency to fall from 69 Afghanis to over 80 Afghanis per dollar.

Experts warn that the depreciation of the Afghan currency, combined with the rising dollar and the migration of over 700,000 Afghans, highlights the severity of Afghanistan’s economic troubles. While DAB’s actions may offer temporary relief, there are growing concerns over the long-term effectiveness of the Taliban’s economic policies.

The economic crisis, alongside inflation and rising unemployment, has contributed to increasing political and social unrest in the country. Analysts argue that the Taliban government must shift its focus from fostering terrorism to prioritizing national development to address the mounting challenges.