Taliban bans use of foreign currencies in Afghanistan

KABUL: The Taliban government banned the use of foreign currencies in Afghanistan in a surprise move that could weigh on an economy struggling with a cash crunch and further isolate the country. 

The move came as the Taliban were pushing for the release of billions of dollars of reserves overseas, which was frozen by the U.S. and its Western allies since the group swept into the power in August.

Without these reserves, the central bank has struggled to maintain flows of dollars into the economy. 

The militant group has ordered the public, from shopkeepers to businessmen, to conduct all trade in afghani currency for the sake of national interests and to help the economic situation.

It is unclear how the Taliban will enforce this ruling given that Afghanistan’s economy has been propped by U.S. dollars since America invaded in 2001 following the 9/11 attacks. Two-thirds of Afghan banks’ deposits and half of the country’s national loans are in U.S. dollars.  

The afghani has continued to depreciate against the U.S. dollar since the Taliban took over more than two months ago. The currency fell to record low of 91.03 per U.S. dollar on Wednesday after news of the ban surfaced the day before.