After the Taliban took over Afghanistan, both its people and its economy suffered. The Afghan central bank cannot replace its fiat currency, and as a result, Afghan bills are crumbling along with the economy.
LA Times Middle East chief Nabih Boulos traveled to Kabul and brought the story to LA Times Today.
The Afghan economy collapsed after the United States withdrew its troops last year.
“What you are seeing are tens of thousands of people who have just lost their jobs across the board. Even for those who would take a job, the currency has depreciated, although not as much as one would assume. There have been some central bank moves that have prevented a major run in the currency. You see the poverty on the streets every day. At this point, aid agencies are forced to feed half the country,” Bulos explained.
Afghanistan has become a cash only economy. However, this cash currency is literally crumbling. Before the Taliban took over, Afghan leaders had a deal with a Polish company to print their money. Sanctions imposed after the takeover have made it impossible to get that money.
“The new government under the Taliban tried to get this money. But every time they try, the sanctions or the fear of sanctions have miraculously prevented them from getting the money into the country. For example, people have resisted the idea of giving money to the Taliban, fearing other countries would sanction it. Companies that were supposed to be transporting all the paper money into the country were scared because they thought they would be subject to sanctions,” Bulos said.
The Taliban also halted a short-lived attempt to bring cryptocurrency into the struggling economy. Bulos discussed whether it was in the best interests of the United States to help stabilize the Afghan economy.
“If there is chaos or weak status, we have problems. But the US is setting up this Afghan fund of about $3.5 billion. With this we want to help the Afghans to rebuild, but without helping the Taliban,” he said.
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