Institute for War and Peace Reporting | Giving Voice, Driving Change

Afghan Money Unwelcome in Southeastern City

In Nangarhar, Pakistani rupees rather than afghanis are common currency.
By Hijratullah Ekhtyar

Afghan army soldier Ahmad Monir had just been paid, and went straight to a currency trader to exchange his afghanis into Pakistani rupees. 

Monir was not planning to travel out of Jalalabad, the main city in Nangarhar province of southeastern Afghanistan, but when IWPR asked him why he needed foreign currency, he replied, “Brother, you must be a newcomer to this city. If you’ve got afghanis, change them into kaldars, because no one will accept afghanis here.”

“Kaldar” is the local term used for rupees.

Asked what was wrong with the national currency, Monir said, “Go to [Nangarhar provincial] Governor Gul Agha Sherzai, and you will see he has dollars and kaldars in his pocket. No one respects afghanis.”

Local resident Rahimdad, on a shopping trip to central Jalalabad, said it was cheaper to buy things in Pakistani currency since a shopkeeper would charge him only ten rupees for an item priced at ten afghanis, when according to the official exchange he should be paying almost twice that amount.

Rahimdad said he would struggle to recognise Afghan banknotes if he ever saw them.

University student Mashal recalled trying to pay for a book in Jalalabad, only to have the bookseller return the cash with the words, “Take this back – I don’t know what it’s worth in kaldars.”

The use of rupees in southern provinces, and Iranian currency in some western border areas of Afghanistan, can be attributed to the destabilising effects of years of war, the lack of strong central government, and forced emigration to Pakistan and Iran, as well as the importance of trade with both countries, in particular for imports of consumer goods. The period since 2001 has added a new currency to the mix, the American dollar, which is used for almost all major transactions.

Currency dealer Ehsanollah told IWPR that everyone, including local government staff and NGO workers, came to him to change their wages into rupees. Meanwhile, the only people buying afghanis were those planning trips to Kabul and other areas to the north.

President Hamed Karzai recently instructed police, prosecutors and bankers to set up committees to curb the circulation of foreign currency and promote the use of afghanis. Although one of these committees operates in Nangarhar and other eastern provinces, it has had little impact to date – everything from food to taxi fares is still paid for in rupees.

Ahmadzai, deputy director of the Afghanistan central bank’s Jalalabad branch, said the local committee was monitoring the use of kaldars on the market and imposing on-the-spot fines on offenders.

He pointed out that the afghani had held its value over the last six years while the rupee had depreciated in comparison, so those who used the latter would lose out financially. But the most important factor was for people to “make a resolute decision that they are Afghans and should use afghanis in their country”.

Shopkeeper Abdol Latif described how a member of the currency committee imposed a fine on him for trading in rupees.

“The same individual turned up a week later… and bought things from me in kaldars. I told him he had fined me for using kaldars, and now he was paying me in them. The man started apologising, saying he was no longer a member of the committee,” Abdol Latif said.

Ahmad Zia Abdolzai, spokesman for Nangarhar governor Sherzai, said the authorities preferred encouragement to punitive fines.

“The use of kaldars has been tremendously reduced compared with the past. We hope our campaign will foster a national spirit… of using afghanis,” he said.

Hajji Azizorrahman, the deputy head of Nangarhar’s chamber of commerce, said it was pointless imposing fines for trading in rupees.

“Kaldars cannot be curbed through cash fines. Shopkeepers will add the value of the fine to their retail prices and pass it on to the customer,” he said.

Azizorrahman said government monetary policy had been uneven and inconsistent, and what was needed was effective legislation that applied to everyone and to all the currencies now in circulation.

“The government should force traders, major contractors and NGO employees to carry out transactions in afghanis, not in kaldars or dollars,” he said.

Hijratullah Ekhtyar is an IWPR-trained reporter in Nangarhar, Afghanistan.