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Lawmakers slam DAB’s old banknote collection policy

Lawmakers slam DAB’s old banknote collection policy

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On
Sep 19, 2017 - 20:03

KABUL (Pajhwok): Some Mesharano Jirga members slammed the government policy regarding collection of old banknotes as ‘inappropriate” but Da Afghanistan Bank (central bank) defended the policy.

On February 1, Da Afghanistan Bank (DAB) said banknotes stuck together with glue, painted with colors, stamped, pale or perforated would be invalidated with effect from the new solar year.

The bank had said the bills joined together with sticky tape or carrying slight lines were valid and excluded from the process.

DAB officials say around 500 branches of government and private banks have been tasked countrywide with collecting such currency notes. Millions of old banknotes have been collected so far.

The Senate members during today’s session said the collection of old banknotes had caused economic losses to people who currently possessed millions of invalidated banknotes.

The lawmakers were of the view that DAB’s wrong policy regarding banknotes had resulted in widespread use of foreign currencies in most parts of the country.

DAB director Khalil Sediqui said 3.1 million afghanis old banknotes had been collected. He said had these old banknotes been allowed to be used in the market, the losses would have been bigger today.

He said DAB announced old banknotes as invalid after a nine-month long deadline and it was not possible to further extend the deadline.

He recalled banknotes not stuck together with glue, not painted with colors and not stamped, pale or perforated were valid for usage despite being old or rejoined with tape.

According to Sediqui, the banknotes collection had a temporary bad affect on economy and would have positive impact in the long run.

Regarding devaluation of the afghani, he said several reasons existed that might have caused degradation of the afghani such as poor economic condition of the country, trade deficit and many others.

Sediqui defended the banknote policy and said due to the proper policy the value of afghani and dollar remained balanced in the market and transparency had been ensured in the value of afghani.

Regarding reforms in DAB, he said the bank polices won support of the International Monetary Fund (IMF) and the organization removed Afghanistan from its blacklist.

The DAB director expressed his concern regarding the use of foreign currency, especially rupee, in parts of the country and said: “If we stop the use of rupee in parts of the country by a decree or order, a black market will come into being and the value of rupee against afghani will surge.”

He added the rupee was smuggled into Afghanistan and dollar was smuggled back to Pakistan. He added DAB did not want a decline the value of dollar though unreal means.

nh/ma