20000405

Afghan currency nosedives amid reports of opium crop damage

KABUL: The Afghan currency on Monday hit an all-time low, pushing prices up amid reports of damage to the country's opium crop Ñ raising concerns among an already impoverished population.

The value of the Afghani slumped as dealers in the capital's Shazada Money Market tried to get rid of the local currency. One US dollar could fetch around 59,000 Afghanis, whereas it was traded for 56,000 last week in the capital's main money market, showing a six percent decline in value.

Inside the market, a big crowd of money changers, carrying wads of money, were trying to sell as much Afghanis as they could. They said the worrying downslide followed an increase in the supply of Afghanis recently on the markets in Kabul and in the southern province of Kandahar.

Some dealers, requesting anonymity, said that the Afghani started losing value after reports that opium poppy crops in southern Afghanistan were damaged by the current drought.

"The Afghani will lose more and more value if the reports prove true," one dealer feared. "The poppy money is the biggest support for the Afghani," he said.

Afghanistan, which has been at war for 20 years now, lacks other revenue resources apart from opium production and fruit exports. Last year the United Nations said the war-torn country was the biggest opium-producer in the world with a production of 4,600 tonnes.

The fall of Afghani has pushed the already unaffordable price of staple wheat flour up by 10 percent which affects the prices of other essential items almost alike.

One "ser" or seven kilogrammes of flour was priced at 100,000 Afghanis in the city markets Monday whereas it was 90,000 Afghanis a few days before, shopkeepers said. In Kabul, where unemployment is on the rise, civil servants are paid only around five dollars a month and a lucky labourer can earn a dollar a day, forcing people to sell their possessions.

The monthly cost of life for an average family is 100 dollars. The economic crunch has compelled many families to migrate to Pakistan and Iran to work as labourers and vendors, though a good number of families here receive relief aid from foreign aid groups.

"The inflation and price-hike are going to kill us eventually," Khial Mohammad, a civil servant said.

"This is like getting us deeper and deeper into the water until we drown," he added.

Another man who was selling his watch said he needed money to buy flour for his hungry family.

"Everything else is gone. Today I have to sell this," he added.

The ruling Taliban Islamic militia, which controls most of the country, is engaged in a costly war with its rival Northern Alliance, led by former president Burhanuddin Rabbani and ex-defence minister Ahmad Shah Masood.ÑAFP