Monopoly Money

[Image by commons.wikimedia.org]

In August of this year, the Taliban took over Afghanistan and implemented its ruling over the country. The Taliban also arose in fear over what would happen soon over its people and the economy. Some of the changes they are making for the government may hurt them badly regarding their currency. A couple of days ago, the Taliban did precisely that and banned all foreign currencies in Afghanistan, including the US dollar.

Given that the US dollar has been used throughout all of Afghanistan in previous years, this decision from the Taliban could potentially collapse Afghanistan's economy. It was bad enough that when the Taliban took control of the country, the economy struggled financially. Now with this law in place, this could make it worse. "The economic situation and national interests in the country require that all Afghans use Afghani currency in their everyday trade," said the Taliban. The problem is that the US dollar is often used in other trade areas bordering Afghanistan cities, like Pakistan. Where other countries use the US dollar, Afghanistan will not accept this currency and could lose trade.

This ruling is meant to be accepted by any business, not just the people. Taliban spokesperson Zabihullah Mujahid stated in an online post, "The Islamic Emirate Instructs all citizens, shopkeepers, trades, businessmen and the general public to henceforth conduct all transactions in Afghanis and strictly refrain from using foreign currency." The post also included, "Anyone violating this order will face legal action." As to what this "legal action" means, it's still unclear. In addition, back when the Taliban took over the country, many of Afghanistan's overseas assets were put on hold by the US Federal Reserve and other banks in Europe.

Before the Taliban took over Afghanistan, the International Monetary Fund (IMF) stated that Afghanistan would not access its resources. At the same time, the World Bank halted the funding for the country. Last month, the IMF also mentioned that the country's economy could decrease by 30%, causing many people to be in poverty.

Other than monetary problems, Afghanistan is also currently suffering from a drought. This drought has also ruined many of its crops and began increasing its prices because of this. Because of this increase in food prices, the United Nations World Food Programme also warned that millions of Afghans could die of starvation combined.

What do you think about this decision? Has the US dollar in Afghanistan become no more valuable than monopoly money? Do you believe that Afghanistan could come back from this with the Taliban in control?