Afghanistan's currency Saturday plunged to an all-time low a day after tough UN sanctions took effect on the expiry of a deadline for the Taliban to surrender suspected terrorist Osama bin Laden.
One US dollar fetched around 79,000 afghanis, down from 76,000 before the imposition of the United Nations curbs, as Kabul's main Shahzada Money Market opened business, dealers said.
"The sanctions have panicked the people," said Haji Amin Khosti, head of the market, which acts as the country's central bank.
"People are keeping hold on their foreign currency and flooding the market with afghanis."
In the afternoon the currency recovered to 78,500 to the greenback after local traders supplied the market with around 250,000 dollars, Khosti said.
"This helped the afghani a great deal," he added.
The fall of the local currency directly affects commodity prices as Afghanistan, in a state of war for 21 years, imports nearly all its needs, including food items.
Prices of essential commodities are beyond the reach of majority of the people in a country where a civil servant is paid only 10 dollars a month and unemployment is high.
One dollar was worth around 1,000 afghanis in 1992 when the Afghan mujahideen resistance factions toppled the pro-Moscow communist government.
The refusal of the Taliban regime, which rules 90 percent of the country, to turn over Saudi dissident bin Laden to stand trial for alleged terrorism led to imposition of the sanctions.
In November 1999 the United Nations Security Council barred the Afghan Ariana airlines from international flights and froze the Taliban's overseas bank accounts.
It toughened the restrictions last Friday, banning foreign trips by Taliban chiefs, closing the ruling militia's overseas offices, freezing bin Laden's assets and imposing an embargo on arms supplies to the Islamist movement.
Bin Laden is wanted by the United States as the suspected mastermind behind the bombings of two American embassies in east Africa in August 1998 -- KABUL (AFP)
© 2001 Al Bawaba (www.albawaba.com)
