The police chief of Kandahar in Afghanistan, General Abdul Raziq, has banned the use of Pakistani currency in the key southern province.
The senior Afghan police officer, who is regarded as one of the country’s most powerful men, has declared the use of Pakistani Rupees (PKR) in business transactions a crime. The general, however, has not decided on the punishment.
According to the Associated Press, PKR has been widely used in Afghanistan’s eastern and southern provinces bordering Pakistan while the Iranian currency is used in the western border provinces.
“I’m not against business, but I don’t want any other currency to be used in our country, especially the Pakistan and Iranian currencies,” Raziq told AP on Sunday.
Although Raziq’s ban came into effect last week, traders said it had an immediate effect, with the Afghan Afghani (AFN) strengthening in recent days.
“This is good news, as people have been confused about what currency they should use and keep,” said Kandahar tribal elder and businessman, Ahmad Shah Khan.
He said the AFN had strengthened to 560 for 1,000 PKR, from 630 per 1,000 before the ban. The official Central Bank exchange rate Sunday was 622 per 1,000.
The AFN has also strengthened against the dollar, from 68 to 65 since the ban was introduced, traders said. The official rate is currently 67.5 AFN to the dollar.
Head of international relations committee of Afghan Chamber of Commerce, Azrakhsh Hafizi, welcomed Raziq’s decision and urged officials nationwide to adopt the ban of foreign currencies.
The use of the US dollar in transactions elsewhere in the country, including the capital Kabul, should also be banned, he said.
“The central bank almost every week buys Afghanis in the market in order to maintain the stability of the Afghan currency but if we used only the Afghan currency all over the country there would be no need,” he said.
Raziq said the currency ban is in retaliation against Pakistan’s alleged protection of the Taliban.
“Pakistan is not only using bombs against us, they use every other tactic they can to destroy us — and that includes our businessman,” he said.
There are signs that Afghanistan is starting to look elsewhere for imported products as a way of pressuring Pakistani authorities into complying with Afghan demands that they force the Taliban into talks to end the war.
Wheat imports — which totalled 2.4 million tons last year, according to the US Department of Agriculture — have traditionally come from Pakistan. But an increase in the customs duty charged by Afghan authorities has cut imports from Pakistan, with the business now going to Central Asian states.
Hafizi said the value of imports from Pakistan had fallen by $700 million since the start of the current financial year in January.
Afghanistan is in the depths of an economic crisis, with gross domestic product growth close to zero and the government’s plans for boosting growth and creating jobs stalled by its inability to improve the security situation.