Money trading boom

Kabul's main money trading market in the district of Sara-ye Shahzadeh [Prince's Palace] has seen a huge surge in traders following the events of 11 September. The number of traders in the market has doubled, according to one of them, Haji Nur, who said there were now about 3,000 people buying and selling the afghani there. Packed to capacity, there is barely room to move, and money is being exchanged in every part of this traditional-style trading place. "Many people are selling household items and furniture in order to have money to exchange for foreign currency at the market," Nur said. The influx of foreign media and international aid agencies has prompted an increasing number of Afghans to engage in the trade. "They can make between US $10 and $15 in a day," he noted, adding that on average, the new traders were taking home a profit of 1,000 afghanis per dollar exchanged, he said. As a former resident of Kabul, Haji Nur returned from the United Arab Emirates following the fall of the Taliban. "I started working as a money trader here about 10 years ago, and I am happy to be back in my homeland," he said. He was now earning between $100 and $1,000 per day. The rate of the afghani against the US dollar is set each morning by the main core of the traders, just before the market opens at 0800 local time. They balance the afghani against the Pakistani rupee. "The rate is also set on demand and supply," Nur said, noting that the political situation was also an important factor in determining the value of the national currency. "When we have good news, the afghani is strong, and when there is bad news, it is weak." When the Northern Alliance came to power, the dollar was weak and the afghani much stronger than it is now. "The rate used to be 80,000 afghanis to one dollar, but then it dropped to 14,000 afghanis to one dollar," Nur said. The currency's dramatic depreciation has had a devastating effect on Afghan aid workers, who, being paid in dollars, are now effectively receiving only half of what they were earning prior to 11 September. However, the traders at Sara-ye Shahzadeh are not complaining. "Business is great, and we have many foreigners here exchanging money," Nur said with undisguised satisfaction. Asked to comment on reports indicating the possibility of the dollar temporarily replacing the Afghan currency, he replied: "How will local people survive?" Some traders were already trying to sell off their stocks. "In the long term, people are worried about what will happen, so they are holding on to their dollars," he explained. Up to three types of Afghan currency - each printed by a different faction - are in circulation. Financial experts say there is a need for these to be abolished in order to make a clean start. "It will be difficult to set a conversion rate," Aqib Elahi, the head of research for Khadim Ali Shah Bukhari Stock Brokers in the southern Pakistani city of Karachi, told IRIN. He, too, voiced concern over the possibility of the dollar replacing the afghani. "Will the Afghan currency be accepted as legal tender from local people, and what rate will it be converted at?" he asked. The Kabul money market, which opened in the 1960s, was originally home to Jewish traders, who in turn were followed by Hindus and then the Mujahidin. Today, however, it was in the hands of the Afghans themselves, Nur said proudly. Between one and two million US dollars a day was being traded there, he added. With no banking system in place, the market also offers other services, such as worldwide money transfers through branches in Dubai and Pakistan, a function that has been in operation for the past 30 years. The traders also offered the traditional "hawala" method of transferring money. "The money is carried by hand from person to person, from one country to another, and this is a common method used between Pakistan and Afghanistan," he explained.