The Afghan economy on the brink
A developing economic crisis in Afghanistan adds a new layer of unrest to the country.
Why is this important: “[T]The value of the Afghan currency could collapse, inflation could accelerate and the mixture of violence and chaos could be prolonged, ”writes the AP.
What’s new: Western Union and MoneyGram wire transfer services have stopped facilitating payments in Afghanistan, a flow of money that is “a key source of support for many Afghan families,” reports the Wall Street Journal.
- The backdrop: ATMs are strapped for cash. The prices of a range of essential products such as flour and oil are rising sharply.
The big picture: The country’s economy has relied on foreign aid that risks shrinking with the Taliban takeover.
What to watch: The Taliban have appointed Mohammad Idris – “an obscure official” – to act as the interim head of Afghanistan’s central bank, charged with directing monetary policy, Bloomberg reports.
afghani, the country’s currency, is in free fall. For a place that makes it easy to trade in US dollars, all imports will become more expensive.
- What they say : “If the Taliban does not soon receive injections of money to defend afghani, I think there is a real risk of currency devaluation which makes it difficult for people to buy bread on the streets of Kabul. ordinary, ”said Graeme Smith of the Overseas Development Institute. the AP.
The bottom line: “Afghanistan, unfortunately, was already facing multiple crises. … On top of that, you will have economic difficulties, ”Ajmal Ahmady, who was head of the Afghan central bank until the fall of the government and his flight from the country, told CNN.