Taliban impose restrictions on remittances as US dollars decline
Afghan banks will no longer be able to offer remittances in anything other than local currency in an effort to protect the country’s declining US dollar reserves.
In recent days, Western Union has received a directive from the country’s central bank to only process remittances in local Afghanis – which are now trading at 86 to the dollar, Reuters reported.
Financial services company MoneyGram International also said it could continue to process remittances only in Afghanis.
Haji Mohammad Idris, the acting governor of the Afghan central bank, is a close ally of the Taliban and has no formal financial experience.
Long afloat with billions of dollars in investment aid from the United States and elsewhere, the country’s reserve of U.S. dollars has shrunk dramatically with the Taliban takeover last month.
“It is a matter of concern that the physical money remaining in US dollars will decrease further,” an Afghan banker told Reuters. “With the restrictions we anticipate, the dollar will rise to over 100 afghanis to the dollar.”
Since reopening under the Taliban, the banks have operated under strict restrictions to avoid insolvency. Customers are limited to $ 200 per week in withdrawals, with corporate clients only allowed to withdraw 20% of their weekly operating expenses.
Afghanistan is one of the poorest countries on the planet with more than a third of the people living on less than two dollars a day.