Afghanistan faces deepening economic crisis under Taliban rule

Afghanistan’s financial and economic situation has plunged into a severe crisis under Taliban rule, 24NewsHD TV Channel reported on Wednesday.

According to the report, in recent months, the rising value of the US dollar and the sharp decline of the Afghani currency have triggered deep concerns.

On August 30, Da Afghanistan Bank (DAB) announced a $20 million auction to stabilise the local currency. This step follows the suspension of US foreign aid and a continuous drop in the value of the Afghani. 

The bank has invited currency exchangers and commercial banks to participate in the auction, requiring successful bidders to make full payments by the end of the business day. Partial payments will not be accepted.

Earlier, on August 17, DAB conducted a $25 million auction in an attempt to curb currency volatility. 

According to sources, the bank has instructed money exchangers and commercial banks to clear their accounts by the end of the day if they secure winning bids.

Currently, the exchange rate stands at 73.58 Afghanis per US dollar, as per DAB. The crisis intensified after former US President Donald Trump issued an executive order on January 24, suspending all foreign aid to Afghanistan for 90 days. As a result, the Afghani currency, which was valued at 69 per dollar, weakened to over 80 Afghanis per dollar.

The economic hardships have led to the mass migration of over 700,000 Afghans, highlighting the worsening situation. While DAB’s policy may provide temporary relief, experts question the long-term viability of the Taliban’s economic strategy.

Under Taliban rule, currency devaluation, inflation, and rising unemployment have fuelled political and economic unrest. With the situation deteriorating, Afghanistan faces the risk of a deeper crisis unless urgent reforms are implemented. 

Observers argue that the Taliban government must prioritize economic stability over militant activities if it hopes to steer the country toward progress.