The Taliban have banned the use of foreign currencies in Afghanistan, citing “national interests” and economic situation in the country. The conflict-torn country’s economy is on the brink of collapse due to the halt in international funding following the Taliban’s takeover of Afghanistan mid-August. The Taliban have mandated the use of Afghani currency in markets and threatened legal action against violators. “The Islamic Emirate instructs all citizens, shopkeepers, traders, businessmen and the general public to henceforth conduct all transactions in Afghanis and strictly refrain from using foreign currency,” Taliban spokesman Zabihullah Mujahid said in a statement posted online.

G20 leaders to discuss Afghanistan funding as UN warns of economic collapse

The US dollar is widely used in Afghanistan for trade, especially in areas bordering neighbours such as Pakistan.

The United States’ Federal Reserve and central banks in Europe have frozen funds held overseas for Afghanistan, which was 75%-dependent on foreign aid before the Taliban takeover.

US says talks with Taliban in Qatar were ‘candid and professional’

“We believe that it’s essential that we maintain our sanctions against the Taliban but at the same time find ways for legitimate humanitarian assistance to get to the Afghan people. That’s exactly what we’re doing,” Deputy United States Treasury Secretary Wally Adeyemo told the US Senate Banking Committee in October. 

Explained: How division among Taliban groups impacts Afghanistan

Ahead of a virtual G20 Extraordinary Leaders’ Summit on Afghanistan last month, UN Secretary General, António Guterres, said Afghanistan was at a make-or-break moment and the international community must find ways to inject liquidity to the save the country’s economy from a collapse. “If we do not act and help Afghans weather this storm, and do it soon, not only they but all the world will pay a heavy price,” he told reporters in New York.

Earlier this year, the International Monetary Fund (IMF) and the World Bank also halted funding for projects in the country.

Last month, the IMF warned that the country’s economy could shrink by 30% this year.