Afghan currency slides, prices surge as economy worsens

Dec 16, 2021, 11:58 PM | Updated: Dec 17, 2021, 5:31 am
An Afghan money changer holds a stack of Iranian currency at Khorasan market in Herat, Afghanistan,...

An Afghan money changer holds a stack of Iranian currency at Khorasan market in Herat, Afghanistan, Wednesday, Dec. 15, 2021. The value of Afghanistan's currency is tumbling, exacerbating an already severe economic crisis and deepening poverty in a country where more than half the population already doesn't have enough to eat. (AP Photo/Mstyslav Chernov)

(AP Photo/Mstyslav Chernov)

HERAT, Afghanistan (AP) — The value of Afghanistan’s currency is tumbling, exacerbating an already severe economic crisis and deepening poverty in a country where more than half the population already doesn’t have enough to eat.

The afghani lost more than 11% of its value against the U.S. dollar in the space of a day earlier this week, before recouping somewhat. But the market remains volatile, and the devaluation is already impacting Afghans.

Afghanistan’s economy was already troubled when the international community froze billions of dollars’ worth of Afghanistan’s assets abroad and stopped all international funding to the country after the Taliban seized power in mid-August amid a chaotic U.S. and NATO troop withdrawal. The consequences have been dire for a country heavily dependent on foreign aid.

Afghanistan was also slated to access about $450 million on Aug. 23 from the International Monetary Fund, but the IMF blocked the release because of a “lack of clarity” about the country’s new rulers. Since then, international envoys have warned of a looming economic meltdown and humanitarian catastrophe.

“People have no money and the prices have gone up,” said Sayed Umid, a 28-year-old shopkeeper selling basic food items such as rice, beans and pulses in a main shopping street in the western Afghan city of Herat.

“Since this morning I haven’t had a single customer,” he said. With rent to pay on his shop and home expenses, he worries he can no longer make ends meet.

Khan Afzal Hadawal, former acting governor of Afghanistan’s central bank, said that the sanctions on the Taliban and the freezing of Afghanistan’s reserve funds “have put the country’s aid-dependent economy on the verge of full economic collapse, leading to historic depreciation of currency,”

“The development agencies, donors, the international community, the U.S., all these should help in this crisis,” he said. “We do understand the concerns of the international community but there are mechanisms (that) can help to manage the crisis and to assist the Afghan people.”

According to the United Nations’ World Food Program, 22.8 million of Afghanistan’s 38 million people already face acute food insecurity, and malnutrition in the country is increasing. A combination of the coronavirus pandemic, a severe drought and the Taliban takeover have left many without jobs, and the currency’s sliding value has been pushing up food prices.

Shopkeeper Jafar Agha said the price of a large container of cooking oil was about 700 afghanis three months ago (roughly $8 at the time), but now costs about 1,800 afghanis (around $18).

“My business has fallen to zero,” he said. “I’m not selling because people have no money. … We don’t have any hope for the future.”

In the bedlam of the Herat Money Exchange market, traders frantically check the ever-changing currency rate on their mobile phones as they jostle through the crowd shouting out prices and waving wads of cash.

A taser-wielding guard keeps the entrance free from the crush, the sound of its sharp clicks enough to send money changers scurrying past into the exchange.

Wednesday wasn’t a good day for trader Said Nadir. He sold U.S. dollars at a rate of 105 afghanis, but then bought at 113 afghanis to the dollar as the currency began to slide and he worried it might fall further.

“The situation is very bad. When the price increases, we cannot find dollars,” he said.

In early August, the afghani was trading at around 80 to the dollar, jumping to around 90 in October. It briefly spiked from 110 on Sunday to 123 on Monday, before recouping somewhat. On Thursday it was trading at around 100 afghanis to the dollar.

For Farzad Haidari, a 34-year-old who imports and sells women’s shawls and scarves, the currency fluctuations have wreaked havoc on his business.

Importing many of his goods from neighboring Iran and with rent on his store in a shopping mall in central Herat set in dollars, he’s seen much of his income evaporate. If the situation continues and prices keep increasing, he said, he could be forced to close his shop.

“Before, when there was uncertainty because of war, we had our business,” he said. “Now there is security, but we’re losing our business.”


Associated Press writer Tameem Akhgar in Islamabad contributed to this report.

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


Associated Press

French energy giants: Reduce fuel and electricity use now

PARIS (AP) — Leaders of three French energy companies on Sunday called on the French public to immediately reduce consumption of fuel, oil, electricity and gas amid shortages and soaring prices due to Russia’s supply cuts and the war in Ukraine. “The effort must be immediate, collective and massive,” the leaders of the three companies, […]
4 hours ago
In this Wednesday, June 22, 2022, image provided by Caladan Oceanic, the pilot house section of the...
Associated Press

Explorers find WWII Navy destroyer, deepest wreck discovered

MANILA, Philippines (AP) — A U.S. Navy destroyer that engaged a superior Japanese fleet in the largest sea battle of World War II in the Philippines has become the deepest wreck to be discovered, according to explorers. The USS Samuel B. Roberts, popularly known as the “Sammy B,” was identified on Wednesday broken into two […]
4 hours ago
Flags affirming LGBTQ identity dress the fencing surrounding the Stonewall National Monument, Wedne...
Associated Press

Pride parades march on with new urgency

NEW YORK (AP) — Parades celebrating LGBTQ pride kick off in some of America’s biggest cities Sunday amid new fears about the potential erosion of freedoms won through decades of activism. The annual marches in New York, San Francisco, Chicago and elsewhere take place just two days after one conservative justice on the Supreme Court […]
4 hours ago
Firefighters work at the scene of a residential building following explosions, in Kyiv, Ukraine, Su...
Associated Press

Russia strikes Kyiv as troops consolidate gains in the east

KYIV, Ukraine (AP) — Russia attacked the Ukrainian capital in the early hours of Sunday morning, striking at least two residential buildings, Kyiv Mayor Vitali Klitschko said, as elsewhere Russian troops consolidated their gains in the east. Associated Press journalists in Kyiv saw rescue services battling flames and rescuing civilians. Klitschko said four people were […]
4 hours ago
Afghan girl carries a donated matrace after an earthquake in Gayan village, in Paktika province, Af...
Associated Press

Destruction everywhere, help scarce after Afghanistan quake

GAYAN, Afghanistan (AP) — When the ground heaved from last week’s earthquake in Afghanistan, Nahim Gul’s stone-and-mud house collapsed on top of him. He clawed through the rubble in the pre-dawn darkness, choking on dust as he searched for his father and two sisters. He doesn’t know how many hours of digging passed before he […]
4 hours ago
Japan's Prime Minister Fumio Kishida is welcomed by German Chancellor Olaf Scholz and Britta Ernst,...
Associated Press

Live updates | EU leader sees ‘unwavering unity’ on Ukraine

ELMAU, Germany (AP) — The Latest on the G-7 summit, the annual meeting of the leading democratic economies, which this year is being held in Germany’s Bavarian Alps: The head of the European Union’s council of governments says the 27-nation bloc maintains “unwavering unity” in backing Ukraine amid Russia’s invasion. European Council President Charles Michel […]
4 hours ago

Sponsored Articles

(Courtesy Condor)...
Condor Airlines

Condor Airlines shows passion for destinations from Sky Harbor with new-look aircraft

Condor Airlines brings passion to each flight and connects people to their dream destinations throughout the world.
Day & Night Air

Tips to lower your energy bill in the Arizona heat

Does your summer electric bill make you groan? Are you looking for effective ways to reduce your bill?
Arizona Division of Problem Gambling

Arizona Division of Problem Gambling provides exclusion solution for young sports bettors

Sports betting in Arizona opened a new world to young adults, one where putting down money on games was as easy as sending a text message.
Afghan currency slides, prices surge as economy worsens