![]() It was unveiled in the market on October 8, 2002. On September 4, 2002, then-President Hamid Karzai announced the new currency. The currency notes were printed in Germany. It was developed for stabilizing the economy and preventing rapid inflation. It replaced the previous currency at two different rates – the government issues of the former President were replaced by the new ones at a rate of 1,000 old, whereas the issues of the Warlord were replaced by the new ones at a rate of 2,000 old Afghani. In 2002, the Afghani got redenominated and adopted the ISO AFN code. The former governor said that it resulted in maybe “trillions” of notes to be in circulation at that time. By that time, about seven different variants of the currency were in circulation. The currency traded at 73,000 Afghani per US dollar in September 2001, sharply rising to 23,000 Afghani after the collapse of the Taliban regime in November 2001 and slipping down to 36,000 Afghani in January 2002. Since 2001, after the involvement of the United States, the currency has been extremely destabilized. As a result, the contract with the Russian company, which had been printing Afghan notes since 1992, was canceled. While Da Afghanistan Bank tried to maintain its exchange rate similar to that of Sarai Shahzada, the difference between the official and free-market exchange rates expanded during the 1980s and the civil war afterward.īriefly, after the Taliban seized charge of Afghanistan’s banks in December 1996, Ehsanullah Ehsan, chairman of the Central Bank of Taliban, announced that most of the Afghan notes in circulation, almost 100 trillion Afghan Afghani, were useless. ![]() However, for several years, there has been a dual exchange rate system in Afghanistan, the one set by the country’s central bank, and a free-market exchange rate dictated by the supply and demand in Kabul’s currency bazaar known as the Sarai Shahzada. Market forces have been freely determining the foreign exchange rate of Afghan Afghani except for during World War I. The continuing political turmoil has slowed the economic growth of the country. ![]()
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