Monday, 29 August 2016

Ban on use of Pak rupee a cheap way for stability of Afghan currency

The embargo on the use of Pakistani currency in business transactions in southern Kandahar province has been warmly welcome, while similar announcement in eastern Nangarhar province was more symbolic, and used as a mere propaganda on Facebook. 
Economic experts believe that banning the use of Pakistani rupee in daily business transactions is a less expensive approach to help maintain Afghan currency stable against foreign currencies, but unfortunately the government is not serious in this regard. The use of foreign currencies, especially Pakistani rupee, in everyday transactions has devalued Afghani, keeping a lion’s share of Afghan banknotes out of circulation, Khalid Hatam, a university lecturer, said. “The government should not leave the decision on the ban of Pakistani currency to local officials; it, through a regulation, should rather issue a blanket ban on the use of foreign currencies to legally preclude the people from using them.” Concurrently with the ban on the use of Pakistani rupee in Kandahar, the Iranian Rial should also be outlawed in Nimruz, Herat and Farah provinces, and government officials be ordered to make all transactions and public contracts in Afghani, Hatam advised the government. According to him, unless Afghan currency was not used in all both small and major business transactions, and that Da Afghanistan Bank -the Central Bank of Afghanistan- did not enact a national regulation banning the use of foreign currencies, Afghani would continue to lose its value. Putting an embargo on the employment of Pakistani currency in day-to-day transactions was a cheap way for stabilizing Afghani as long as it was not symbolic, Hatam opined. Meanwhile, civil activists in Nangarhar, stress that the use of Pakistani rupee in business transactions continues unabated in the province, and that the provincial officials’ statements vowing to prohibit the use of Pak currency were their propaganda on Facebook. “All business transactions in Jalalabad and the districts are still carried out in Pakistan rupee, and the people mostly carry rupee other than Afghani in their pockets. The statements made by provincial officials a few days back about embargoing Pak rupee were all symbolic, and are yet to be implemented,” Khyber Shinwari, a civil activist, told The Heart of Asia. Razmal Zaman, an independent journalist from Kandahar, said that the use of Pakistani currency has completed stopped in the province, increasing the value of Afghani among the people. “No one can use Pakistani rupee in Kandahar, and whoever violating the ban is caught by the police, he is jailed for two to three days. This should be done at the national level, not only in one city and province,” Shinwari expressed to The Heart of Asia. A legal expert, Zahid Safi, uttered that it was the legal responsibility of the government to compel the people to use their own currency. “Though Da Afghanistan Bank has a regulation on foreign exchange, there no legal document to govern the use of foreign currencies. As like in other countries, a country which has an official currency shall use it in all its business transactions.” If the government followed the issue more seriously, its results would be very effective for the stability of Afghan currency, Safi told the Heart of Asia, adding that it was less likely that the government would do anything thereof given its weak stance on the issue. It merits to mention that all business transactions in provinces lying along the Durand line are carried out in Pakistani rupee, while the Iranian Rial is used in other provinces bordering with Iran.