KARACHI, May 31: The visiting governor of the central bank of Afghanistan Dr Anwar-ul-Haq Ahady says Pakistani rupee and US dollar are very much in currency in his country along with its own revalued afghani.
“These currencies are very much there but after the launch of re-denominated afghani the extent of their use has reduced,” he said while talking to Dawn after addressing a press conference at State Bank headquarters here on Saturday. He said the new afghani worth 1,000 old afghanis had gained enough strength to challenge the wide spread use of foreign currencies including US dollar and Pakistan rupee. The head of the Afghan central bank admitted that before the launch of re-denominated afghani US dollar and rupee were used frequently to settle payments. “Besides there were many versions of afghani issued by different authorities and warlords which were in circulation in the country.”
Currency experts say US dollars and Pakistan rupees that had been in widespread use in Afghanistan before the end of Taliban era in late 2001 — and that during the US led “war on terrorism” in the land-locked country the two countries had gained extra excess — thanks in Afghan society for purchasing loyalties of pro- Taliban tribes and individuals. Besides the international agencies engaged in the reconstruction of Afghanistan were also free to make payments in the US dollars.
But now the situation is different. And according to Dr. Ahady the new stronger afghani has become a universally accepted single currency of Afghanistan. Earlier he said at the press Conference that the new afghani has gained some stability in past few months and its current exchange rate is around 48.5 to a US dollar. He said one of the basic purposes of introducing the new currency was to keep an eye over monetary expansion and the central bank has met this objective to a great extent.
ASSETS AND RESERVES: Dr. Ahady said that the assets that were frozen during the Taliban regime by the Western governments had been de-frozen after the installation of the interim government in Kabul. “Without that we would have gone bankrupt,” he said.
Dr. Ahady said the Federal Reserves of the US had de-frozen some $250 million worth of gold reserves of Afghanistan placed there since 1939. He said in addition to this his country also had $200 million liquid foreign exchange reserves. “So we have a total foreign exchange reserves of more than $450 million,” he said. He said the central bank of Afghanistan has not only made some outward foreign exchange payment during the recent past out of its own resources but has also built up the reserves. He said in the past five months Da Afghanistan Bank has added some $30-40 million to its liquid forex reserves.
AUTONOMY: In response to a point raised by Dawn Dr. Ahady said the central bank of Afghanistan was exercising limited autonomy at the moment — and had sought standard autonomy through a draft law. “This draft law is currently under study of the ministry of justice,” he said and hoped that it would be cleared and accepted by the government soon.
Dr. Ahady said at the present the central bank of Afghanistan is autonomous in the sense that it is independent of the ministry of finance — but it is not independent of the president of the government. He said once the central bank gets more autonomy it would have a totally free hand in making monetary policy like all other central banks. He said even now the government does not advise the central bank of Afghanistan on how much to lend — that is there is no government-imposed credit ceilings for borrowers.
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