Afghan afghani

Afghan afghani
Currency name in local	افغانۍ (Pashto), افغانی (Dari)
Iso code	AFN
Using countries	Afghanistan
Subunit ratio 1	1/100
Subunit name 1	pul
Issuing authority	Da Afghanistan Bank
Issuing authority website	dab.gov.af
Inflation rate	-0.7% (2023 est.)
Inflation source date	World Bank
Replaced currency	Afghan afghani (1927–2002)
Date of introduction	2002

Afghan afghani. The afghani is the official currency of Afghanistan, issued by the nation's central bank, Da Afghanistan Bank. It was introduced in its current form in 2002, replacing the previous afghani at a rate of 1,000 to 1. The currency is subdivided into 100 puls, though inflation has rendered the pul obsolete in practical terms.

History

The first afghani was introduced in 1925 under the rule of Amanullah Khan, replacing the Afghan rupee and aligning the country's monetary system with its political independence. The currency underwent a major redenomination in 2002 following the fall of the Taliban government and the establishment of the Islamic Republic of Afghanistan, which was supported by the International Monetary Fund and the United States. This reform aimed to curb hyperinflation and stabilize the economy after decades of conflict involving the Soviet–Afghan War, the Afghan Civil War (1992–1996), and the War in Afghanistan (2001–2021). The management of the afghani has been significantly impacted by changes in regime, most recently with the return of the Taliban to power in 2021, which led to sanctions from the United States Treasury and frozen reserves.

Coins

Coins in circulation are issued by Da Afghanistan Bank and include denominations of 1, 2, and 5 afghanis. Earlier coin series featured effigies of historical figures like Ahmad Shah Durrani and symbols such as the Mosque of the Sacred Cloak in Kandahar. The current, more simplified coinage often bears national emblems like the mihrab and minbar, reflecting Islamic design principles. Historically, coins were minted in metals such as copper, nickel, and aluminum, with higher denominations like the 25 and 50 afghani coins rarely used due to low purchasing power.

Banknotes

Banknotes are printed under the authority of Da Afghanistan Bank and currently circulate in denominations of 10, 20, 50, 100, 500, and 1,000 afghanis. Designs prominently feature landmarks including the Pul-e Khishti Mosque in Kabul, the Blue Mosque in Mazar-i-Sharif, and the Kabul Bank building. Historical figures such as Mahmud of Ghazni and Ahmad Shah Durrani have appeared on older notes. Following the 2021 takeover by the Taliban, new banknote series have been introduced, removing human imagery in accordance with the regime's interpretation of Sharia law.

Exchange rates

The afghani's exchange rate is influenced by Da Afghanistan Bank monetary policy, humanitarian aid flows, and trade with neighbors like Pakistan and Iran. Its value saw extreme volatility during the Republic of Afghanistan (2004–2021) but stabilized somewhat after 2021 due to strict capital controls and a reduction in imports. The primary exchange markets are in Kabul and Herat, with rates often diverging from the official rate set by the central bank. The currency is not freely convertible and is heavily managed against major currencies like the United States dollar and the euro.

Security features

Modern afghani banknotes incorporate multiple security features to prevent counterfeiting, including watermarks depicting the Seal of Afghanistan, security threads with microprinting, and color-shifting ink. Intaglio printing is used for raised tactile elements, while ultraviolet light reveals fluorescent patterns and the denomination numeral. These features are developed with technical assistance from international security printing firms and are crucial for maintaining confidence in the currency, especially in regions with high circulation of counterfeit notes from illicit networks.

Economic role

The afghani serves as the primary medium of exchange for domestic transactions within Afghanistan, facilitating trade in sectors like agriculture and opium production. Its stability is critical for the delivery of humanitarian aid by organizations such as the World Food Programme and the United Nations Assistance Mission in Afghanistan. The currency's value directly impacts remittances sent via hawala networks from the Afghan diaspora in Iran and Pakistan. Monetary policy, now under the control of the Taliban administration, focuses on controlling inflation and managing the limited foreign exchange reserves held by Da Afghanistan Bank.

Category:Afghanistan Category:Currencies of Asia