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Afghanistan issues new currency
( 2002-10-07 09:22 ) (8 )

Given it takes a mountain of afghani banknotes to buy a car or rent a house in Afghanistan, it is no wonder many traders prefer Pakistani rupees or, even better, US dollars.

The fact that the Afghan currency's value usually registers daily fluctuations of almost seismic proportions is another good reason to grab for the greenback.

But, after today's launch of a new Afghan currency, again called the afghani, both the rupee and dollar could become spent forces in the war-shattered nation.

The new notes, worth 1,000 of the old afghanis, are to be initially distributed among Afghanistan's private money changers.

They will hit the streets in two to three weeks, replacing the cumbersome and frequently forged old banknotes.

It is hoped the revalued afghani will stabilize the country's economy, which has been severely battered by more than two decades of fighting, and help attract the foreign investment crucial to Afghanistan's reconstruction.

Confidence in the new money is already running high and many traders in the Afghan capital Kabul are expressing faith by turning away from the dollar in favour of the patriotic payments.

"When the new money arrives, we will obviously be very happy to accept it as long as it remains stable," said Zmarai Ishaqzai, owner of the city centre Mohammad Mansoor electrical goods store.

At the moment, Ishaqzai prefers to take American cash for his top-of-the-line TV sets, currently charging a 10 per cent markup for afghani transactions.

To buy a US$300 Sony Nicam colour set, purchasers would need 13,800,000 afghanis - a stack of bank notes that would equal the size of the television. In the new money, the set will cost 12,000 afghanis.

"For us it would still be better to receive US dollars because that is the currency with which we buy in our stock," he added.

"But the new afghani will do just as well."

Mohammad Farooq, another Kabul electrical retailer, says the new money will usurp both the Pakistani rupee and the dollar.

"We would prefer the new currency because it is our money, our currency and it will bring stability to our country," he said. "For us, its value and power will be higher than for rupees."

Kabir Raof, who runs a carpet shop on Chicken Street, is also eager for afghanis, although he suspects few of his customers will use them.