Use of Dollar increases as Afghani remains unstable

Monday, 10 July 2017 03:23 Written by  Heart of Asia Published in Economy Read 101 times

The use of American dollars has increased on the local markets as the Afghani currency remains unstable following insecurity and unprecedented incidents in the country post 2014.

 

Local businessmen say they have used the dollar in big deals from many years including in car deals, house purchases and land transactions. 

The businessmen said they use the dollar because according to them it is a stable currency for their transactions. 

Najibullah, a local businessman and head of Kabul Car Sellers Union, said he has used dollars instead of Afghanis for car deals in his business for the past 37 years.

“If I sell a car in Afghani and then want to buy another, the seller would ask for dollars (instead of Afghani). The Afghani currency fluctuates by 20 cents, 30 cents and sometimes by one dollar against the dollar once a week,” Najibullah said.

The value of the Afghani currency fluctuated sharply between 2013 and 2014. But since 2015, the value of the currency has decreased unprecedentedly.

“It is crucial for government to use Afghanis in all of its contracts and dealings,” said Najmuddin Sayas, an economic affairs analyst said.

Mawla Mohammad Paiman, owner of a restaurant in Kabul, said he does all his business in Afghanis instead of dollars and has done so for the past year but he has lost hundreds of thousands of Afghanis.

“We mostly lose (money), when we buy in dollars and sell in Afghani,” he said.

According to the Central Bank law, businessmen are free to use any currency in their dealings, but government institutions must use Afghanis. 

The Central Bank spokesman Aimal Ashor said local businessmen use foreign currency in their dealings in order to prevent money inflation.

He said the Central Bank continues to intervene in the market to promote Afghanis.

“We intervene in the market through currency exchange to take out the Afghani currency when its not in demand in the market. By this, our money will ow in line with economic growth,” he added.

Sources from government institutions said that the “dollar is being used by a number of government institutions instead of Afghanis, even for buying furniture".