Feb 8, 2023
Taliban Tighten Currency Controls After Dollar Smuggling Report
(Bloomberg) -- The Taliban imposed fresh restrictions on people carrying foreign currency out of Afghanistan via a rare directive from the prime minister’s office after a report that millions of dollars were being smuggled in each day from Pakistan, shoring up its battered economy.
Tuesday’s order from Mullah Mohammad Hassan’s office spelled out new currency limits clearly for the first time and laid out new punishments — up to a year in prison. While a $5,000 limit was already in place, the new edict added that the amount people could take via road border crossings was only $500 and barred the transport of gold or precious stones out of the nation.
“If someone transfers a million dollars, he will be imprisoned for a year, and for hundred thousand dollars, he will be jailed for a month and for less than the amount, he will receive ten days in jail,” the order said.
The Taliban also reiterated that bringing in foreign currency is “prohibited,” without specifying how much and under what circumstances. Before the report’s publication, the Afghan Finance Ministry had said that it encourages individuals to bring in any value of foreign currency.
Bloomberg reported Tuesday that traders or smugglers are bringing as much as $5 million into Afghanistan from across the border with Pakistan, providing some support for the country’s squeezed economy after the US and Europe denied the Taliban regime access to more than $9 billion in foreign reserves.
However, the illicit dollar outflows are exacerbating a rapidly developing economic crisis in its neighboring Pakistan.
--With assistance from Ismail Dilawar.
©2023 Bloomberg L.P.
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