A Dollar's Worth In Afghanistan: Exploring Purchasing Power Parity

The currency of Afghanistan is the Afghan Afghani, which has been in use since the 1920s. The exchange rate is around 70-75 afghanis to 1 US dollar, so 1 afghani is worth approximately 0.014 US dollars. As such, it is unlikely that you would be able to buy anything for 1 afghani in Afghanistan.

The Afghan Afghani (AFN) is the national currency of Afghanistan

The Afghani was introduced in 1923 during the era of King Amanullah Khan, replacing the Afghan rupee. The currency is printed in Poland and is managed solely by Afghanistan's central bank, Da Afghanistan Bank (DAB).

The exchange rate of the Afghani has fluctuated over the years. In 1973, the currency traded at 67 Afghanis to one US dollar. After the start of a civil war in 1992, the same US dollar bought 16,000 Afghanis. In November 2023, the exchange rate was around 70 Afghanis to one US dollar.

In 2002, the Afghani was redenominated and received a new ISO 4217 code, AFN. This new currency replaced the previous Afghani at two distinct rates: issues of the government of former President Rabbani were replaced at a rate of 1,000 to the new Afghani, while the issues of Dostum were replaced at a rate of 2,000 to the new Afghani. This monetary reform was well-received by the public, as it was a sign of security and stability, especially in the country's rebuilding efforts.

The Afghan economy has faced numerous challenges due to decades of war, resulting in high levels of terrorism, poverty, and child malnutrition. Despite these challenges, the Afghani has shown resilience and, in the third quarter of 2023, it rose to become the best-performing currency in the world, climbing over 9% against the US dollar.

The currency was created in 1925 to replace the Afghan rupee

The Afghan Afghani (AFN) is the official currency of Afghanistan and has been since the 1920s. The currency was first introduced in 1923, however, some sources state that it was created in 1925. The Afghani replaced the Afghan rupee, which had been in use since 1891. The currency was reformed again in 2002 as part of an attempt to support the currency and decrease inflation.

The Afghani is nominally subdivided into 100 puls (پول), although there are no pul coins in circulation. The currency is printed in Poland and is managed by the nation's central bank, Da Afghanistan Bank (DAB). The exchange rate is around 70 afghanis for 1 US dollar.

The original Afghani was introduced during the era of King Amanullah Khan. It was subdivided into 100 puls, and 20 afghanis were equal to one amani. The rate of conversion from the rupee is sometimes quoted as 1 afghani = 1 rupee 6 paisas, based on the silver content of the last rupee coins and the first Afghani coins. The Afghani initially contained 9 grams of silver.

The currency has undergone various changes over the years, with different leaders and factions introducing their own banknotes. In 2002, the Afghani was redenominated and received a new ISO code, AFN. The new currency was announced by President Karzai and was introduced to the market on 8 October 2002. This reform was well-received by the public as it signalled security and stability, especially in the country's rebuilding efforts.

The exchange rate is around 70-80 AFN to 1 USD

The Afghan Afghani (AFN) is the national currency of Afghanistan. The exchange rate is around 70-80 AFN to 1 USD. This means that 1 AFN is worth approximately 0.013-0.014 USD.

The Afghani was introduced in 1923, replacing the Afghan rupee, and is informally referred to as a rupee by some in conversation and transactions. The currency is printed in Poland and managed by Afghanistan's central bank, Da Afghanistan Bank (DAB).

The AFN has undergone several reforms, including in 2002 when it was redenominated and received a new ISO code, AFN. This reform aimed to stabilize the economy and curb inflation. The previous Afghani had a fixed exchange rate, while the AFN is a floating currency.

The value of the AFN has been influenced by political and economic factors, including the Taliban's control of the country and the freezing of its foreign assets. In recent years, Afghanistan's economy has experienced low inflation rates, with the AFN valued at around 75 AFN to 1 USD in 2019.

The current notes in circulation in Afghanistan are 1, 2, 5, 10, 20, 50, 100, 500, and 1000 AFN. The lower denominations of 1, 2, and 5 AFN are also available as coins but are less common.

The AFN operates on a managed floating exchange rate

The Afghan Afghani (AFN) is the official currency of Afghanistan and has been since the 1920s. The name "Afghani" was first used in 1925, replacing the Afghan Rupee. The current issue of the currency was introduced in 2002 after the US invasion, replacing the two separate Afghanis then in circulation. The currency is managed solely by Afghanistan's central bank, Da Afghanistan Bank (DAB). DAB has adopted a floating exchange rate regime, allowing the exchange rate to be determined freely by market forces.

The exchange rate has fluctuated over the years due to various factors, including political instability and economic conditions. In 2023, the exchange rate was around 70-75 AFN to 1 USD. However, after the re-establishment of the Islamic Emirate of Afghanistan in 2021 and the subsequent freezing of the nation's foreign assets, the value of the Afghani fell. As of May 2024, the exchange rate is approximately 72 AFN to 1 USD.

The AFN is divided into 100 puls (پول), although there are no pul coins in circulation. The most common denominations of banknotes in circulation are 1, 2, 5, 10, 20, 50, 100, 500, and 1000 AFN. The lower denominations of 1, 2, and 5 AFN also have coins in circulation, but these are less common due to the higher exchange rate with the US dollar.

When exchanging foreign currency in Afghanistan, it is important to note that larger denomination notes tend to receive better exchange rates. Additionally, while some businesses may accept foreign currencies such as USD or Euros for larger purchases, most restaurants, cafes, and small shops will only accept AFN.

The currency is managed by Afghanistan's central bank, Da Afghanistan Bank

The currency of Afghanistan, the Afghani, is managed by the nation's central bank, Da Afghanistan Bank (DAB). DAB was established in 1939 and is wholly government-owned. It is responsible for formulating, adopting, and executing the monetary policy of Afghanistan, as well as holding and managing the country's official foreign-exchange reserves. DAB also prints and issues Afghani banknotes and coins, and acts as a banker, adviser, and fiscal agent of the state.

DAB has around 52 branches throughout Afghanistan, with seven of these located in the country's capital, Kabul, where its headquarters is also based. The bank's seal features the name of the bank in Pashto at the top and Latin script at the bottom, the year 1939, and a depiction of a Eucratides I-era coin with the Greek text "ΒΑΣΙΛΕΩΣ ΜΕΓΑΛΟΥ ΕΥΚΡΑΤΙΔΟΥ", which translates to "Of the great king Eucratides".

In recent years, there have been concerns about DAB's independence from the Taliban administration and its safeguards against money laundering and terrorism financing. A US-funded assessment by the US Special Inspector General for Afghanistan Reconstruction (SIGAR) found flaws in the management of the bank and concluded that it lacked independence from the Taliban regime. This has led to a standoff over the Taliban's demand for the return of DAB cash frozen in other countries.

Despite these challenges, DAB continues to play a crucial role in maintaining the value of the Afghani and promoting financial stability in Afghanistan.

Frequently asked questions