Isolation, Meet Desperation
AFGHANISTAN
The Taliban banned the use of foreign currencies in Afghanistan this week, a move that deals another blow to the country’s devastated economy following the armed group’s takeover and the withdrawal of international aid, the BBC reported Wednesday.
Officials said that Afghan citizens must “strictly refrain from using foreign currency,” and could “face legal action” if they violate the order.
The country’s economy has been on the brink of collapse due to the withdrawal of international financial support that followed the Taliban’s takeover of Afghanistan in August after the departure of US troops.
Since the takeover, the United States Federal Reserve and European central banks moved to freeze Afghanistan’s overseas assets. Western countries have also refused to recognize the new Taliban government.
The Taliban have been demanding the release of those assets, saying the country is facing a cash crunch. Until this week, many locals have been using US dollars at markets, including areas near the border of Pakistan.
The situation has sparked concern that Afghanistan might be teetering into a humanitarian crisis: The International Monetary Fund estimated that the Afghan economy could shrink by 30 percent this year, forcing millions into poverty and fueling a refugee crisis in neighboring nations, who already host millions of Afghans.
The United Nations has also warned that millions of Afghans could also be at risk of starvation following a severe drought that ruined much of the country’s wheat crop and sent prices soaring.
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