Afghanistan’s central bank chief upbeat over stable AFN

KABUL (Ariana News): The acting head of Da Afghanistan Bank (DAB) says that the value of the afghani (AFN) against the US dollar has remained stable compared to that of other currencies in the region.

Hadayatullah Badri said in a Supreme Council of Da Afghanistan Bank meeting this week that the liquidity situation in banks has improved because “people’s deposits in the Islamic banking sector have increased by 4 percent compared to the previous quarter.”

Issues that were also discussed at the meeting included the effective implementation of monetary policies, the state of the banking sector, efforts to develop Islamic banking, the mechanization of exchange activities and people’s access to financial services.

However, it subsequently plummeted into deflation, reaching -9.0 percent in March 2024.

Similarly, food inflation decreased from +26 percent in June 2022 to -13.8 percent in March 2024.

The persistent deflation is reflecting a fall in food prices and weak consumer demand.

However, WFP stated: “While deflation supports low food prices, limited number of job opportunities and low wages will continue to weaken household purchasing power.”

Exchange rate: The monthly average exchange rate between AFN and US dollar was recorded at AFN 72.0 per 1 USD.

After its surge in January 2022, the value of AFN started to consistently appreciate against the US dollar during the year 2023 and remains relatively stable, hovering around AFN 70-74 per USD since November 2023.

Factors such as US dollar auctions by the Da Afghanistan Bank, ban on foreign currencies for domestic transactions, increased remittances, and UN dollar shipments significantly contribute to the stability of AFN, WFP reported.