currencies

Afghanistan central bank to sell $10 million to support currency

Reuters
Afghanistan central bank to sell $10 million to support currency

CURRENCY. A money changer holds a stack of US dollars in Kabul, Afghanistan, April 23, 2014.

Omar Sobhani/Reuters

The central bank invites eligible banks and foreign exchange dealers to bid in the sale

Afghanistan’s central bank said it would sell $10 million through an auction to banks and foreign exchange dealers on Tuesday, November 16, as it seeks to support the afghani currency from a sharp fall in recent days.

With the abrupt withdrawal of foreign support following the Taliban victory in August, Afghanistan’s economy has gone into freefall, putting a severe strain on the banking system which has set weekly withdrawal limits to stop a bank run.

Some $9 billion in central bank reserves held outside the country have also been frozen by the United States, despite growing calls for them to be released to help ease the financial squeeze that is strangling the economy.

According to a money exchanger in the main Sarai Shazada exchange, the afghani was quoted at 93.80 to the dollar. That compared with a price of 91.20 four days ago.

The central bank invited eligible banks and foreign exchange dealers to bid in the sale. It said all successful bids had to be cleared in full by the end of the day.

“We assure our esteemed compatriots that the functioning of the country’s banking system will soon return to normal and that the stability of the afghani will be maintained,” the central bank said in an announcement. – Rappler.com