The value of the Afghan currency, Afghani (AFN), has been rapidly depreciating against the US dollar since early January 2025.

This comes following the US President Donald Trump warning that billions of dollars' worth of aid should not be sent to the Taliban without the condition of returning the US military equipment left behind during the US withdrawal from Afghanistan.

The United States was providing $40 million in humanitarian aid to Afghanistan every week, which was received by the Afghanistan International Bank and implemented through the United Nations for humanitarian projects.

Afghanistan's economy relies heavily on international aid, the recent halt in assistance has significantly impacted the value of the Afghani (AFN) over the past few weeks. US President Donald Trump's executive order suspended foreign aid, including to Afghanistan, for three months pending review. Additionally, USAID announced the suspension of all its projects in Afghanistan and terminated contracts for upcoming projects.

Although various other factors may have also contributed to the Afghani's depreciation, the surge in the dollar's value is primarily attributed to the US President's decision to halt foreign aid to several countries, including Afghanistan, for 90 days, effective January 24, 2024, as stated by the State Department.

The Trump administration began with a series of executive orders on the first day at office. Among the orders was banning all foreign aid, except those for Israel and Egypt, for 90 days. Trump said that the aid would be reviewed to make sure it is in line with his foreign policy objectives.

Meanwhile, the Central Bank of Afghanistan has issued a statement reassuring the nation that it possesses sufficient resources to stabilize the value of the Afghani (AFN) and is closely monitoring the exchange markets, according to The Khorasan Diary correspondent from Kabul. 

Although the Afghanistan Central Bank auctioned millions of USD three times over the past week to stabilize the value of AFN against the US dollar, the effort has had little impact, as the depreciation continues.

The Afghani (AFN) depreciated further against the US dollar on January 26, with the exchange rate reaching 1 USD = 82.50 AFN, sparking concerns in the market. In response, the Afghan government announced plans to auction $25 million on January 27, the largest single-day sale since August 15, 2021.

Afghanistan Central Bank convened a special meeting with the Union of Money Exchangers in Kabul on January 26, focusing on stabilizing the Afghani (AFN) against foreign currencies, particularly the US dollar. 

During the meeting, participants urged the Central Bank to maintain a stable AFN value, regulate food prices and take decisive action against dollar smuggling.

In the meeting with representatives of money exchangers, the head of the Afghanistan Central Bank reaffirmed government commitment to stabilising the AFN. "We are committed to keeping the AFN stable, taking measures for the stability of the economy and managing the prices of food in the market,” 

Furthermore, an official from the Afghanistan Central Bank announced plans to auction US dollars in provinces as well, aiming to strengthen the Afghani's value against the US dollar.

However, the increasing value of the US dollar in Afghanistan has also driven up food prices. A comparison of some essential food items in Kabul's market reveals the following price increases:

- Sack of Flour: AFN 1,350 to AFN 1,560

- Sack of rice: AFN 2,230 to AFN 2,550

- One liter of oil: AFN 100 to AFN 108

- One liter of fuel: AFN 58 to AFN 62

- One liter of gas: AFN 55 to AFN 60

Concerns are growing among ordinary Afghans and investors due to the current market uncertainty. They worry that this instability could adversely affect ongoing infrastructure projects in the country and exacerbate the humanitarian crisis, potentially leading to inflation even in basic food items.