In a surprising turn of events, the Afghan currency, the Afghani, has surged to become the best-performing currency in the third quarter of 2023. Since July 1st, it has witnessed a remarkable 9% increase against the US dollar. This achievement places the Afghani as the third-strongest performing currency for the entire year, trailing only the Colombian peso and the Sri Lankan rupee.

In Afghanistan, foreign currency transactions primarily occur in money exchange shops known as “sarrafs.” These sarrafs are widespread, found in markets, shops, cities, and villages across the country. The largest sarraf market, Sarai Shahzada in Kabul, functions as Afghanistan’s financial hub, facilitating substantial daily currency trading.

Notably, financial sanctions have shifted the flow of funds into Afghanistan. Most money entering the country from abroad now moves through the traditional money transfer system known as “Hawala,” which has become a vital component of the sarrafs’ operations.

Despite the positive currency performance, Afghanistan faces significant economic challenges. The Taliban’s strict currency controls, imposed since their return to power in August 2021, prohibit the use of the US dollar and Pakistani rupees by locals and restrict online trading. While these measures have supported the Afghani’s value, they have contributed to a deteriorating humanitarian situation with soaring unemployment and a majority of the population living in poverty. The country is in dire need of aid, highlighting the urgency of addressing its humanitarian crisis.

www.theadvocatepost.org