The Telegraph reported on December 25 that Afghanistan’s exchange rate story is one of remarkable recovery over the past year, taking the country’s national currency, the afghani, to its highest level against the dollar since early 2018.

This year’s gain of more than 28 percent reportedly came two years after the Taliban’s return to power in 2021. That sent the currency tumbling to its nadir in early 2022, as Kabul was cut off from international funds.  But the afghani has more than recovered those losses.

The rebound is more than can be said for the wider economy – GDP crashed by 25 percent after the Taliban takeover and the World Bank expects no growth this year, The Telegraph says, noting that life under the repressive regime is particularly harsh for women.

The currency has reportedly recovered in part because some aid flows have resumed.  The authorities have also banned the use of foreign currencies, boosting local demand for the afghani.

But the World Bank has warned the exchange rate is distinctly vulnerable to any interruption in those flows of dollars.    

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