It’s only natural to perceive that the unending wars have negatively affected Afghanistan’s economy, something that is true to a great extent. Despite the conflicts, our country is still struggling to strengthen its economy through various ways such as working on trade ties with global countries and properly balancing imports with exports. But working on the value of the currency has remained neglected while it is an aspect that leads to a stronger economy. Afghanistan has been enduring the issue of stabilizing its currency for decades now as Pakistani currency is being used in its stead – which is again a byproduct of the decades of war – in eastern Afghanistan, especially in Nangarhar, Laghman, Khost, Paktia and some other provinces. Although some occasional measures have been carried out over the years by banning Rupee, the Afghan government has still been unable to completely replace Rupee with Afghani. In a fresh clampdown on the foreign currency, five shops have been shut down in Jalalabad, the capital provincial city of eastern Nangarhar province, as the shoppers still used Pakistan Rupees in their daily business. This follows a supportive drive by Nangarhar doctors who early this month decided to receive fee payments from patients only in Afghani, saying they would not accept the Pakistani currency. Meanwhile, government servants in southeastern Khost province last week restricted people’s entry to government departments holding Pakistani rupees in their pockets. Despite these efforts are laudable, there are some other ways that the government should avail of in order to emerge victorious in this process of making people switch to Afghani from Rupee.
First of all, there are inherently two parties – households/consumers and traders – in the market which should be encouraged to do their transactions in local currency. To achieve this end of promoting Afghani, the best course of action is providing them with incentives such as providing a somehow special advantage to them for doing business in the domestic currency. This is while most Afghans aren’t quite well off and they see a benefit in using Rupees. It’s because they receive a double amount when they convert Afghanis into Rupees and thus buy necessary commodities relatively cheaper than Afghanis – somewhat because rates are not fixed and high in domestic currency. For resolving this issue, the government should work together with traders to define controlled, standard and fixed rates in Afghani and also reduce prices. For standardizing rates, products should carry price tags in Afghanis and traders should be asked to sell their products to wholesalers in Afghani. Furthermore, the government should conduct campaigns against Rupee and promote Afghani by spreading awareness regarding its benefits. The switch from Rupee to Afghani would help strengthen the domestic currency, whose extensive circulation would ultimately lead to our currency’s appreciation. When our Afghani’s value has increased, it would in turn result in reducing inflation because imports would become cheaper and the lower prices lead to lower inflation. At the same time, consistent monitoring of the market would help a long way in ridding the country of the foreign currency. Combating foreign currency is a huge ordeal but a synergy among the government, civil society and citizens is the best course of action to dispose of it and thus contribute to the economic growth of the country.