Afghans complain of rising food prices as currency loses value

KABUL: Residents of the Afghan capital have complained of rising food prices as the local currency lost value against the US dollar in recent days.

The currency fell to around 80 Afghanis to the dollar on Monday after hovering around 70 in recent weeks.

Kabul residents have reported rising prices of basic goods and are concerned they will not readjust in one of the poorest countries in the world, where consumers are anxiously following policy announcements from US President Donald Trump’s new administration.

Observers link the change to Trump’s decision to freeze US foreign assistance. The United States remains Afghanistan’s largest aid donor.

Afghanistan’s currency stability in part depends on US dollars flowing in to aid organisations that are then exchanged in the market for Afghani, analysts said.

Afghan bread, the humble centrepiece of every meal

The fear is that “this dollar is not going to come anymore. So the Afghani does not have takers”, said analyst Torek Farhadi, who was an adviser on the development of the Afghani in the years after the end of the first Taliban reign in 2001.

For Abdul Maroof Niaz Zada, a 40-year-old Kabul shopkeeper, the fluctuation “may mean nothing to the rest of the world, but it has a big impact in Afghanistan”.

“The price changes are not noticeable for the businessmen maybe but it’s very difficult for the poor,” he said, noting that the prices of daily goods such as flour, oil and rice had gone up by 200-500 Afghanis ($2.60 - $6.70).

The World Food Programme said in January nearly 15 million people are going hungry across Afghanistan, with the UN agency providing aid to help people get through the country’s harsh winters.

“Food, fuel, gas, everything gets expensive as the dollar goes up,” 28-year-old Tofan Ahmadi, who works at a Kabul currency exchange, told AFP.

The Afghani’s stability depends “largely on Afghanistan’s ability to secure consistent foreign exchange inflows, either through sustained remittances, aid, or by diversifying its export base”, the World Bank said in a December 2024 report.

It underscored “the reduced capacity of Afghanistan’s foreign exchange reserves to shield the economy from external shocks”.

The Afghan central bank, which told Afghans “not to worry” about currency fluctuations, met with major money changers and announced an auction of $25 million on Monday.