News / Asia

Afghanistan Also Pinched by Iran Sanctions

An Afghan man prepares food at his roadside restaurant in Kabul, November 14, 2012.
An Afghan man prepares food at his roadside restaurant in Kabul, November 14, 2012.

Related Articles

TEXT SIZE - +
Sharon Behn
— In the span of a few weeks, the Afghan currency has dropped several points against the dollar. Government officials and money exchangers in Kabul say that Iranian businessmen, hungry for foreign exchange in the face of international sanctions, are buying up dollars from the Afghan economy and driving the Afghani down.
 
Kabul's main currency market is located on the streets and walkways of a open-air bazaar, with dozens of dealers sitting in front of piles of cash from different countries.
 
Currency rates are set by the daily supply and demand. Dollars come and go quickly here.
 
The head of Afghan's Exchange, Haji Najeeb Ullah Akhtary, says dollars are moving too quickly, driving the value of the Afghani down.
 
Much of the pressure, he says, comes from neighboring Iran, where international sanctions and a banking embargo are aimed at pressuring the country to comply with inspections of its suspected nuclear weapons program.
                                                                                                 
He says the sanctions with Iran are affecting us. He says dealers bring Iranian currency here because they have no way of exchanging it in their country.
 
"The sanctions with Iran are affecting us," he says. "We have a long border with Iran, and dealers are bringing Iranian currency here, as they have no way of purchasing [foreign exchange] money over there."

U.S. Treasury officials have urged Afghan traders not to process dollar exchanges for Iran. The governor of Afghanistan's Central Bank, Noorullah Delawari says despite those restrictions, the illegal trade in dollars is continuing.
 
"Because of these external pressures or demand for foreign currency, we see a drain on foreign currency from our market," said Delawari. "More than the $20,000 limit is being smuggled outside. We are working with regional governors or region provinces to stop that, and this month alone we had over five situations where bad people were caught smuggling money out of the country in Herat province alone."
 
Herat lies on Afghanistan's western border with Iran.
 
Trade between Iran and Afghanistan is estimated at around $2 billion per year, but the vast majority of that consists of Iranian exports. Iranian ports also provide a key trade link for land-locked Afghanistan. Afghanistan's other main alternative is through Pakistani ports, but contentious relations between the two countries mean that Kabul wants to keep its options open.
 
Deputy Trade Minister Muzamel Shinwari says sanctions that bar Afghan banks from working with the Iranian banking sector are having a negative impact on Afghanistan's overall economy. Foreign firms that are caught doing business with Iranian companies can themselves be hit with sanctions.
 
Those restrictions are particularly difficult for Afghanistan, when it comes to fuel imports.

Afghan officials say they mainly import fuel from Turkmenistan, Iraq and Iran. Officials say because of international sanctions, Iranian fuel is cheap, encouraging smuggling.

But Shinwari worries that if sanctions against Iran are tightened, and Afghan businesses are punished, it could further damage the country's fragile economy.
 
"Now when the fuel is coming under the sanctions, it is creating a bigger problem for us, and we are negotiating that with the United States government on how to better sort that problem, as we don't have the domestic production of fuel," said Shinwari. "And if we stop bringing it from Iran, it will create an economic crisis in the country, which will lead to the political crisis, which will lead to unrest in the region."
 
With Kabul already bracing for the exit of international forces in 2014, the continuing sanctions on Iran are likely to add to the struggles of Afghanistan's fragile economy.

You May Like

Multimedia Anti-Keystone XL Protests Continue

Demonstrators are worried about pipeline's effect on climate change, their traditional way of life, health and safety More

Thailand's Political Power Struggle Continues

Court gave Prime Minister Yingluck Shinawatra until May 2 to prepare her defense over abuse of power charges but uncertainty remains over election timing More

Malaysia Plane Search Tests Limits of Ocean Mapping Technology

Expert tells VOA existing equipment’s maximum operating depth is around 6 kilometers as operation continues on ocean bed for any trace of MH370 More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Pet Kangaroo Helps Spread Environmental Messagei
X
Penelope Poulou
April 22, 2014 5:53 PM
Children’s author Julia Heckathorn travels the world to learn about different ecosystems and endangered animals. She pours her knowledge into children’s books, hoping the next generation will right the environmental wrongs of our times. As in many children's books, the main character in Heckathorn's stories is an animal. Unlike those other characters, though, this one is real - a kangaroo, that lives in the author’s backyard. VOA’s Penelope Poulou has more.
Video

Video Pet Kangaroo Helps Spread Environmental Message

Children’s author Julia Heckathorn travels the world to learn about different ecosystems and endangered animals. She pours her knowledge into children’s books, hoping the next generation will right the environmental wrongs of our times. As in many children's books, the main character in Heckathorn's stories is an animal. Unlike those other characters, though, this one is real - a kangaroo, that lives in the author’s backyard. VOA’s Penelope Poulou has more.
Video

Video Pro-Russian Separatists Plan 'Federalization Referendum' in Eastern Ukraine

Pro-Russian separatists in eastern Ukraine say they plan to move forward next month with a referendum vote for greater autonomy, despite the Geneva agreement reached with Russia, the U.S. and Ukraine to end the political conflict. VOA's Brian Padden reports from the city of Donetsk in Eastern Ukraine.
Video

Video Pope Francis Hopes Dual Canonizations Will Reconcile Church

On April 27, two popes - John the XXIII and John Paul II - will be made saints in a ceremony at St. Peter’s Square. VOA religion correspondent Jerome Socolovsky says the dual canonization is part of the current pope’s program to reconcile liberals and conservatives in the Roman Catholic Church.
Video

Video In Capturing Nature's Majesty, Film Makes Case for Its Survival

French filmmaker Luc Jacquet won worldwide acclaim for his 2005 Academy Award-winning documentary "March of the Penguins". Now Jacquet is back with a new film that takes movie-goers deep into the heart of a tropical rainforest - not only to celebrate its grandeur, but to make the case for its survival. VOA's Rosanne Skirble reports.
Video

Video Boston Marathon Bittersweet for Many Runners

Monday's running of the Boston Marathon was bittersweet for many of the 36,000 participants as they finished the run that was interrupted by a double bombing last year. Many gathered along the route paid respect to the four people killed as a result of two bombings near the finish line. VOA's Carolyn Presutti returned to Boston this year to follow two runners, forever changed because of the crimes.
Video

Video International Students Learn Film Production in World's Movie Capital

Hollywood - which is part of Los Angeles - is the movie capital of the world, and many aspiring filmmakers go there in hopes of breaking into the movie business. Mike O'Sullivan reports that regional universities are also a magnet for students who hope to become producers or directors.
Video

Video Pacific Rim Trade Deal Proves Elusive

With the U.S.-led war in Iraq ended and American military involvement in Afghanistan winding down, President Barack Obama has sought to pivot the country's foreign policy focus towards Asia. One aspect of that pivot is the negotiation of a free-trade agreement among 12 Pacific Rim nations. But as Obama leaves this week on a trip to four Asian countries he has found it very difficult to complete the trade pact. VOA's Ken Bredemeier has more from Washington.
Video

Video Autistic Adults Face Housing, Job Challenges

Many parents of children with disabilities fear for the future of their adult child. It can be difficult to find services to help adults with disabilities - physical, mental or emotional - find work or live on their own. The mother of an autistic boy set up a foundation to advocate for the estimated 1.2 million American adults with autism, a developmental disorder that causes communication difficulties and often social difficulties. VOA's Faiza Elmasry reports.
AppleAndroid