Chaos in Kabul amid currency rumours

Thursday, 31 January, 2002, 14:28 GMT BBC News

Currency usually changes hands in crowded Kabul marketplaces

Afghanistan's currency markets have been plunged into chaos, amid reports that the Afghani could be abandoned temporarily for the dollar.

Chaos was reported at Kabul's central market, the main currency trading point, with people frantically trying to change money at fluctuating rates.

One dollar now buys about 36,000 Afghani.

Earlier in the week, the IMF's Warren Coats said that decisions need to be made about how to proceed until a new currency is introduced.

Rival currencies

Many believethat a new currency is needed, with at least three versions of the currency - some of them introduced by warlords - in circulation.

Introducing and establishing a new currency could take between several months and a few years and questions have arisen about what should be done in the interim period.

The BBC's Damian Grammaticas said: "There is absolutely no plan, there is no suggestion that the government will replace the Afghanis with dollars.

"What is under discussion is what to do in the next few months to keep the situation stable as they prepare to launch a new Afghani."

Panic

One option is to keep the current Afghanis in circulation and use dollars for banking transactions, mostly to import essential goods.

However, the lack of clarity about the future of the currency has caused many people to panic.

"I bought yesterday at 28,000 (afghanis to the dollar) and today I have to sell at 36,000. I'm losing a lot of money," said Basir Rasoly.

The afghani has soared and plunged dramatically over the past several months between 73,000 - following the 11 September attacks - and 23,000 following the fall of Kabul.