Deteriorating banknotes latest blow to Afghan economy

By Najibullah

A stack of worn-out Afghan banknotes is seen in this photograph July 27 in the courtyard of Sarayee Shahzada, a currency exchange market in Kabul. [Najibullah/Salaam Times]

A stack of worn-out Afghan banknotes is seen in this photograph July 27 in the courtyard of Sarayee Shahzada, a currency exchange market in Kabul. [Najibullah/Salaam Times]

KABUL -- An excessive accumulation of worn-out Afghan banknotes has been causing trouble for money traders and ordinary residents throughout Afghanistan, money changers and their customers told Salaam Times.

Afghans commonly use cash in market trading, but the deteriorating condition of many of their banknotes, some of which should have been removed from circulation long ago, has complicated many transactions, they said.

A pile-up of thousands of worn-out afghani bills -- soiled, torn, defaced or otherwise damaged -- forced Herat's currency exchange market to close on July 17, with residents complaining over the worthless tender.

Old banknotes have caused enormous daily challenges, said Mohammad Zahir Amiri, 48, an employee of a non-governmental organisation in Kabul.

An Afghan money changer counts banknotes in the courtyard of the Sarayee Shahzada currency exchange market in Kabul on February 28, 2017. [Wakil Kohsar/AFP]

An Afghan money changer counts banknotes in the courtyard of the Sarayee Shahzada currency exchange market in Kabul on February 28, 2017. [Wakil Kohsar/AFP]

Afghan money changers count banknotes at the Sarayee Shahzada currency exchange market in Kabul on December 17, 2015. [Wakil Kohsar/AFP]

Afghan money changers count banknotes at the Sarayee Shahzada currency exchange market in Kabul on December 17, 2015. [Wakil Kohsar/AFP]

"When we withdraw our salaries, the bank gives us old money," Amiri said.

"When I plead with the cashier at the counter to replace the bills with banknotes in better condition, the tellers say they give out whatever money is available, and that we have to take it," he added.

"If we withdraw 20,000 AFN ($222) from the bank, for example, about 8,000 AFN ($89) of that cannot be exchanged," he said. "And with such money, we always get into trouble with the shopkeeper."

"Moreover, inevitable quarrels break out between commuters and [taxi/bus] drivers every day," Amiri said.

Mohammad Reza Habibi, 28, a food wholesaler in Kabul, said customers keep arguing with him over the use of old banknotes.

"If we accept old banknotes, traders and bankers refuse to take them from us," Habibi said. "Right now, I have 100,000 AFN ($1,112) and nobody will accept it from me."

"Unfortunately, the majority of afghani paper bills are worn out and not suitable for circulation in the market," said Mohammad Hassan Mohammadi, a money changer in Kabul.

"Such banknotes must be withdrawn from the market," Mohammadi said.

Since last year, neither the bank nor any other money changers have been willing to accept some 50,000 AFN ($556) of his old banknotes, he said.

"I remember a customer wanted to exchange $1,000 for afghanis, but he insisted on new bills. Because all the money I possessed was worn out, we started an argument, which led to a nasty quarrel," Mohammadi recalled.

Customers 'have no choice'

Kabul Money Changers Association chairman Haji Zeerak told Salaam Times that he has been receiving daily complaints about worn-out banknotes from money changers all over Afghanistan.

"The issue of old banknotes has become a serious challenge among the public, money changers and the banks," Zeerak said.

"Banks always refuse to accept old banknotes from their customers, but they give out old banknotes to the public," he said.

Customers "have no choice but to take the worn-out banknotes", he added.

The circulation of old paper currency in the market and the issuance of worn-out banknotes to the public have been a huge setback for the country's economy, he added.

A dedicated unit in the Central Bank of Afghanistan that is responsible for collecting old banknotes is sitting idle, while the circulation of tattered paper money has become yet another crisis for the country, he said.

The circulation of old banknotes has adversely affected ordinary Afghans, money changers, traders and the economy of Afghanistan, said Kabul money changer Mirza Mohammad Siddiqi, 32.

"Most of the money changers in Kabul and the provinces have hundreds of thousands of worn-out afghanis left, and no one is willing to take them," he said. "This is indeed a big shock to the Afghan economy."

"This challenge is increasing day by day," said Siddiqi, citing two recent cases of hardship caused by the banknote crisis.

"One example ... was the closure of the money changers' market for several days in Herat," Siddiqi said,

In addition, several money changers in Kabul have recently gone out of business, he said.

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The interferences of the neighboring countries, especially Iran and Pakistan, in the banking system of Afghanistan is another problem that caused many challenges to the prevalence of Afghani. Pakistan In recent years has been regularly trying to bring down the value of Afghani by printing and exporting fake banknotes. Meanwhile, Iran has also tried to damage Afghani’s market by setting up money laundering networks. Along with this, due to the sanctions on Iran, a large amount of USD is collected from Afghanistan’s market and smuggled to Iran. USD are also being smuggled to Pakistan. The problem of the prevalence of Pakistani Rupee in the provinces that share borders with Pakistan is another serious problem. Recently, due to the decrease in the value of the Pakistani Rupees, the businessmen and ordinary people in those provinces have suffered severe financial loss. I ask the current rulers of Afghanistan to prevent the interference of Iran and Pakistan in the financial system of Afghanistan by adopting regular mechanisms. Thanks


According to statements of the Central Bank of Afghanistan, since the fall of the republic until now, Afghanistan has received nearly $1 billion for humanitarian aid through the United Nations. While such an amount of money played a vital role in the stability of the afghani's value, in the meantime we are seeing a decrease in the number of afghani banknotes in the market every day, and a huge number of these banknotes are also worn out, it has been said that nearly 10 billion afghani banknotes that were printed in Poland during the republic era haven’t been handed over to Afghanistan ... It’s being said that the United States and its European allies are preventing the delivery of this money to Afghanistan. If the European countries and the United States really care about the Afghans, they must allow that money to be handed over to Afghanistan, because the number of afghani bills is decreasing in the market day by day, which would cause many problems for the ordinary Afghans. Thanks


We should try to keep our country's money properly. We have to buy wallets to protect our money. A wallet costs 100 or 200 afghanis, which can prevent money from getting damaged. Any money that is not stored will get damaged. People of every country keep the money of their country safe. Please do not treat your country's national values lightly.


This is the best way to save money, but I wish we know to take it into practice. And if we still don't implement it, no one will print other afghani banknotes for us, and the existing ones will also wear out and be removed from circulation.


The problem is not only the exhaustion and tattering of afghani banknotes; rather, it is much wider than what we think. According to the media, the United States Special Representative for Afghanistan Reconstruction (SIGAR) says that Afghanistan’s banking system is completely paralyzed and the central bank of this country can’t function properly. These statements of SIGAR are quoted from a detailed report of this agency on the economic situation of Afghanistan to the US government, in which the liquidity crisis is highlighted as the main economic challenge in Afghanistan. SIGAR has added that the lack of support from international banks has caused banks not to trust any small and private companies in Afghanistan. As stated by SIGAR's report, the US shouldn’t see the injection of money into Afghan banks as sufficient; rather. it should fully support the activities of banks in that country. SIGAR's report says that money injection has not helped the growth of the economy and it is necessary to give loans to Afghan banks to stimulate economic mobility. After the recent developments in the country, all sections of Afghanistan have been severely damaged. Even though so far millions of dollars have been given to the banks of this country by foreign countries and international organizations, it has not resulted in any benefit to improve the situation of Afghanistan's banking system. In the meantime, American officials have recently confirmed that they have discussed with the


We welcome SIGAR's proposition. The truth is that America is a great country, and it should not forget that it has significant responsibilities in the world. Especially in Afghanistan, where the US has spent 20 years, if any problem comes to Afghanistan, the responsibility will be returned to the US in one way or another. Another thing is that there is a problem between the American army and the armed groups in Afghanistan. I am mentioning the armed groups that Pakistan was training and equipping against the Afghan government and the international coalition at China's expense.
Another thing is between the American people and the Afghan people. This second relationship is based on love, respect, affection, and friendship. I asked Helmandi, who created the Helmand canal development project. He said America. Who built Kandahar Airport? He said America. I am not talking about aggressive America. I am talking about a civilized America that loves Afghanistan. It is a stupid thing coming out of Pakistan's propaganda machine where they say that the Taliban has defeated America...because neither Taliban can defeat America nor Pakistan. Neither Russia nor China. However, it is challenging to say the same thing about China because they are also huge bastards. Anyway, the big thing is that the US should help Afghanistan in the civil and economic fields and carry out projects that will give fame to the US and benefit Afghanistan. Long live Afghanistan, long live America, long live the frie