Thanks to billions of dollars in humanitarian aid and increased trade with Asian neighbors, Afghanistan’s currency, the afghani, has surprisingly climbed to the top of global rankings this quarter.
The Taliban-controlled medium of exchange has jumped 9% against the greenback since July 1, according to data from Refinitiv, meaning it tops the global rankings for the period.
The strong run means the afghani is now up 14% year-to-date – making it the world’s third-strongest performing currency of 2023, behind only the Colombian peso and the Sri Lankan rupee, per Bloomberg.
The ruling Taliban, which seized power two years ago, has also unleashed a series of measures to keep the afghani in a stronghold, including banning the use of dollars and Pakistani rupees in local transactions and tightening restrictions on bringing greenbacks outside the country. It has made online trading illegal and threatened those who violate the rules with imprisonment.
The UN, which estimated that Afghanistan needs about $3.2 billion of aid this year, has deployed about $1.1 billion of that, according to the world body’s financial tracking service. Last year, the organization spent around $4 billion as half of Afghanistan’s 41 million people faced life-threatening hunger.
The World Bank forecasts that the economy will stop contracting this year, posting growth of 2% to 3% until 2025, though it warned of risks such as a reduction in global aid as the Taliban intensifies its repression of women.
Despite being a poverty-stricken nation with one of the world’s worst human rights records, their currency controls, cash inflows and other remittances have lead them to this feat.