The new Taliban government has issued a ban on the use of foreign currencies across Afghanistan. The move is expected to further disrupt the country's economy, which is already on the brink of collapse.
The Taliban reasoned that the ban will be in the country's own interest. Taliban spokesman Zabihullah Mujahid said in a statement that all citizens, traders, businesses, and the general public are now required to only conduct transactions using Afghanis, the country's currency, and refrain from using any other foreign currencies.
Even up to now and during the time when the U.S. was still active in the country, Afghan markets and businesses have been widely using the U.S. dollar to conduct transactions. The U.S. currency is also widely used in trade and transactions in areas close to the country's borders.
Under the new order, issued by the Islamic Emirate, anyone found to still be using foreign currencies will be punished with immediate legal action.
The U.S. Federal Reserve and European central banks froze billions of dollars of Afghanistan's offshore assets when the Taliban took control of the nation in August. In the midst of a serious financial shortage, the Taliban has demanded the release of Afghanistan's assets kept abroad.
The withdrawal of international aid has also hurt Afghanistan and its new Taliban government. Grants from other countries formerly covered three-quarters of the country's governmental spending.
Deputy U.S. Treasury Secretary Wally Adeyemo previously stated that the country has no plans to lift its sanctions against the Taliban government. However, the U.S. is willing to cooperate with legitimate humanitarian organizations to provide aid to the Afghan people.
The International Monetary Fund (IMF) said earlier this year that Afghanistan would no longer be able to use its resources, and the World Bank likewise stopped sponsoring projects in the country. This has greatly exacerbated the economic situation in the country.
The IMF warned last month that the country's economy might contract by 30% this year, putting millions of people in poverty and generating a humanitarian disaster. Afghanistan's economic troubles, according to the fund, may spark a refugee catastrophe that would affect neighboring nations, Turkey, and Europe.
