Afghan currency crashes amid turmoil as central bank chief flees Kabul

Afghanistan’s national currency, the afghani, continued to plummet on Tuesday as Taliban fighters took control over the capital city of Kabul. The head of the country’s central bank, Ajmal Ahmady, has fled the country.

According to messages left by the governor in a Twitter thread, the central bank was told there would be no more dollar supplies, which cut the regulator’s ability to bolster national currency, spreading more panic across the country.

The afghani dropped 1.7% on Tuesday to 83.5013 against the US dollar, marking the fourth day of decline, according to data tracked by Bloomberg.

“Currency spiked from a stable 81 to almost 100 then back to 86. I held meetings on Saturday to reassure banks and money exchangers to calm them down,” Ahmady wrote.

The political turmoil that swept Afghanistan over the weekend has spread to markets in neighboring Pakistan, where sovereign dollar bonds due in 2031 fell 1.8 cents on Monday, demonstrating the largest drop since pricing in March. Meanwhile, Pakistani dollar bonds reportedly suffered the biggest losses in Asia on Monday. The securities grew by 0.2 cents on the dollar on Tuesday to 100.5 cents.

Taliban forces entered Kabul on August 15 days after US President Joe Biden announced that all American forces would leave the country by September 11, the 20th anniversary of a series of terrorist attacks against the US.

The takeover of the Afghan capital was preceded by years of tensions and attacks by the Taliban – listed as a prohibited terrorist organization in Russia.

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