Rise in dollar not alarming, DAB tells Senate

KABUL Bank (DAB), on Tuesday said it could inject dollars into the market for domestic needs, but could not sell dollars to meet the demand of neighbouring countries.

DAB Director Khalil Sedique told this to the upper house of parliament after being summoned to brief lawmakers on the sudden depreciation of the afghani against dollar.

In mid-August, one dollar was exchanged for 72.90 afghanis but recently the dollar’s price of soared to 77.90 afghanis.

Some lawmakers blamed the afghani’s depreciation on growing smuggling of dollars to Iran and limited induction of dollars to the local market.

But Sedique said the smuggling of dollars to Iran was not solely responsible for the decline in the afghani, but it indeed had an impact.

He listed growing insecurity in the country, global appreciation of the dollar, widening trade deficit and downward domestic production among factors contributing to the depreciation of the afghani.

“I don’t deny that dollars are smuggled, it is not in our interest, and the issue has been conveyed to the concerned authorities through formal letter,” he said, when asked about smuggling of dollars.

He said as a result of improvement in the US economy, the currencies of other countries had suffered.

He said the revival of sanctions on Iran also played a role in the depreciation of the afghani because despite smuggling of dollars, Afghanistan and Iran annual trade volume stood at around three billion dollars.

He said Afghanistan wished or not, the imposition of sanctions on Iran would affect the afghani and that the recent rise in the American dollar was not alarming.

Senate Chairman Fazal Hadi Muslimyar asked security institutions to ensure the smuggling of dollars to Iran was stopped because it played a major role in the afghani’s fall.

nh/ma

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