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Depreciating Afghani causing price-hike in the market

in Afghan Business

Depreciating Afghani causing price-hike in the market

afghani moneyThe increasing prices of essential commodities has become intolerable among the Afghan people.

The Lower House of the Parliament summoned Finance Minister Hazrat Omar Zakhilwal, Chief of the Central Bank Noorullah Dilawari and Deputy Commerce and Industry Minister Muzammil Shinwari to confer on the issue and resolve it instantly.

Minister Zakhilwal cited “political pressure” from foreign countries as one of the main reasons behind the price-hike in the Afghan market.

According to the Minister, a number of foreign countries have recently mounted political pressure on Afghanistan, resulting in depreciation of Afghani. He added that since Afghanistan receives most of its commodities through imports that are purchased in US dollars, a lower Afghani against the US dollar  obliges traders to sell the goods in the market at higher rates.

He warned prices would not go down until Afghani picked up value against the US dollar.

Commodities witnessed drastic increase in the prices after President Hamid Karzai refused to sign the key bilateral security pact with the US.

Lawmakers have urged the President to sign the agreement to prevent prices from increasing further.

Shinwari pointed out that thousands of trucks laden with fresh fruits and vegetables were denied entrance to Kabul city during the consultative Loya Jirga due to security concerns. He added that a bomb blast in front of a Pakistani customs office in Torkham border also contributed to the increase in prices.

He also added that transit of goods through Salang Pass has declined as well due to heavy snowing, which has added to the price-hike issue in the country.

Meanwhile, Delawari said the bank had circulated over USD 3 billion into the Afghan market to stabilize Afghani currency. However, he said many foreign currencies had fallen against the US dollar. While Afghani has depreciated by 8%, the Pakistani rupee, Indian rupee and Iranian Rial has fallen by 13%, 8% and 40% respectively.

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