Afghanistan: Taliban government bans online sales in foreign currency as of July 5

Event

The Ministry of Interior has expanded restrictions on financial transactions in foreign currency across Afghanistan, citing Islamic laws. Taliban officials have outlawed digital foreign currency exchanges and trading. Authorities also specified that people can only sell, rent, and take out mortgages for Afghan land, houses, shops, markets, equipment, and vehicles in the Afghani (AFN). Violators will face action under the Islamic Sharia law. Taliban officials have not clarified if the rule applies to foreign nationals in the country, and enforcement remains unclear.

Context

The Taliban has mandated locals to use Afghanis for domestic transactions from November 2021; however, reports indicate that officials have not strictly implemented that measure. The latest announcement could indicate an attempt to improve enforcement levels as the Taliban continues to navigate an economic crisis fueled by international sanctions. Nearly 40 percent of Afghanistan's gross domestic product depended on international aid before the Taliban seized power. Afghanistan's central bank remains without access to the country's USD 9 billion in foreign reserves as human rights concerns continue to prevent diplomatic recognition of the Taliban administration.

Advice

Heed all official instructions. Plan for possible business disruptions, especially if processing online payments or paying for capital expenses in foreign currencies.