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Afghani Surpasses Dollar as World’s Top-Performing Currency: How Did This Happen?

In an unexpected turn of events, the Afghani, Afghanistan’s Currency, has emerged as the world’s best-performing currency in the third quarter of 2023, exhibiting a remarkable 9% surge against the US dollar since July 1.

Remarkably, the Afghani now stands as the third-strongest performing currency in the year 2023, trailing only behind the Colombian peso and the Sri Lankan rupee.

Within Afghanistan, the populace engages in foreign currency transactions at local money exchange establishments known as “sarrafs,” which are ubiquitous in cities, towns, and villages.

The largest and most prominent sarraf market is situated in Kabul, bearing the name Sarai Shahzada. It serves as Afghanistan’s financial hub, witnessing substantial daily transactions involving thousands of dollars.

The nation’s central bank has placed no restrictions on trading activities. However, due to financial sanctions, the majority of funds sent to Afghanistan from abroad now rely on an ancient money transfer system known as “Hawala,” which has become an integral part of the sarrafs’ operations.

The United Nations (UN) has asserted that Afghanistan requires approximately $3.2 billion in aid for the current year, with $1.1 billion already disbursed.

Last year, the UN allocated approximately $4 billion in aid, prompted by the dire circumstances faced by half of Afghanistan’s 41 million citizens, who were on the brink of famine.

Since the Taliban’s resurgence in Kabul in August 2021, stringent currency controls have been implemented, prohibiting locals from using the US dollar and Pakistani rupee while also restricting online trading.

These measures have indeed bolstered the Afghani’s value, but they have come at a cost to Afghanistan’s economy, resulting in a significant surge in unemployment and exacerbating the nation’s humanitarian crisis.

Regrettably, nearly 79% of the population currently grapples with poverty, and a staggering 44% of individuals face severe food shortages.

This post first appeared on Xavier Radio Ug, please read the originial post: here

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Afghani Surpasses Dollar as World’s Top-Performing Currency: How Did This Happen?


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