Hope is creeping into Afghanistan
Afghan currency strengthens as crisis grips country
News/Current Events News
Source: Reuters
Published: Monday, September 24, 2001
Posted on 09/24/2001 03:14:03 PDT by JohnHuang2
PESHAWAR, Pakistan, Sept 24 (Reuters) - Afghanistan's beleaguered currency has risen dramatically in the past few days as traders and businessmen speculate that the crisis gripping the country could lead to a change of government.
Rumours that ageing ex-king Mohammad Zahir Shah was returning have also helped strengthen the afghani, while shortages of food, fuel and other essentials mean paper money is in demand, said traders in this western Pakistani city near the Afghan border.
"The main reason according to many people in the market is the return of Shah," said Amin Kosti, the head of Kabul's main Shahzada (prince) money market, where some 300 traders do business.
One U.S. dollar was fetching around 55,000 afghanis on Monday -- down nearly a third from the 78,500 it was worth last week.
But in reality it has only returned to near levels seen before the devastating attacks on Washington and New York on September 11 thrust the spotlight on Afghanistan as a likely target for American retaliation.
The United States is preparing military strikes against the Taliban to punish them for protecting Saudi-born fugitive Osama bin laden, chief suspect in the attacks.
Zahir Shah, who has lived in exile in Italy since being dethroned in 1973, has ruled out trying to restore the monarchy in Afghanistan but has offered to play a role in establishing a transitional government should the Taliban be unseated.
The former monarch, who ruled for 40 years before being overthrown, is seen as a symbol of unity among different Afghan ethnic tribes and groups, and hails from the majority Pashtun tribe that ruled for centuries.
PEACEFUL ERA
His pro-West outlook is considered to have brought about one the most peaceful eras in Afghanistan's modern history.
While the Afghan currency strengthened, prices of essentials have soared as residents stockpiled food, fuel and other basic goods in the event of a long stand-off with the United States.
Afghanistan imports most of its food as well as fuel from neighbouring countries, who have sealed off their borders in cooperation with the U.S. action and to prevent a flood of refugees.
The price rises and food shortages have been exacerbated by the withdrawal of all western aid agencies after the Taliban said they could not guarantee their safety.
Kabul's thriving money market is the largest in the country, one of the strangest in the world and the only entity to survive the last 22 years of war, changes of government and a floundering economy.
All deal in cash, and mounds of billions of afghanis are piled up in tattered bundles. The arbitrage is great and volumes small -- only about $1.0 million a day traded by an open outcry system.
The afghani has plunged from a few hundred to the dollar in the early 1990s. |
