While the rupee continues to fight an uphill battle against the dollar in Pakistan after crossing the Rs300 mark, a neighboring country presents a different picture.

A recent World Bank report has revealed that the Afghan currency, called the Afghan Afghani, has risen in value against most currencies since the start of this fiscal year.

A major thing that sets apart the Afghan economy from the rest of the world is that it is experiencing negative inflation or deflation. Overall inflation is at -9.1% while food prices have decreased by 12%.

Still, the Afghani has risen in value against the US dollar, the Pakistani rupee, Chinese Yuan and Euro.

However, the report mentions a number of other factors that lead to an improvement in the currency’s value.

One reason is that remittances coming from Afghan citizens abroad have slowly increased, amounting to $1.04 billion in the first six months of this year.

However, another major factor is that the government has imposed a blanket ban on conducting transactions inside Afghanistan using any foreign currency. This drives down the demand for foreign currencies in the country and their value is not manipulated by trade.

The Afghan Taliban government has placed a mximum limit for how much money a person or business can withdraw from the bank ina week. The limit was fixed at AFN 30,000 but was raised to AFN 50,000 for individuals in May. For companies, the limit was raised from AFN2.5 million to AFN 4 million.

By placing limits on transactions, the government ensured there is more money kept in banks which helps stabilise the economy.

Finally, the report adds that the foreign exchange market in Afghanistan is ‘balanced’ and there is no sign of a parallel system. This means that the currency exchanged in Afghanistan can be found at a stable and uniform rate everywhere without any hoarding, or black marketing.