CURRENCY AND PAYMENTS IN AFGHANISTAN
The currency in Afghanistan is called afghani (with an international code being AFN while the local abbreviation is Afs). This currency was first introduced in 1925. Before then, Afghan rupee was the currency used in the land. Its origin went back to the rule of Pashtun monarch She Shah Suri who issued the first rupees in the 16th century.
In 2002, the originally currency afghani (AFA) was replaced with new aghani currency (AFN).
The currency consists of coins and banknotes. Besides afghanis, pul have also been used. One afghani equals 100 pul. Pul is however not in circulation anymore.
Besides pul and afghani, people in Afghanistan might also use another currency, Amani, even if only in speech. One Amani equals twenty afghani.
New afghani currency was introduced at the end of the year 2002. This was largely due to virtually no standardization before 2001 when banknotes could be issued by warlords and political parties themselves. This led to inflation and depreciation of the currency. In 1996, one U.S. dollar could be traded for 21,000 afghanis. Russian firm used for printing the currency until that time had its contract cancelled by Taliban’s Central Bank.
Coins of afghani currency come in the value of 1, 2 and 5 afghani. Besides these coins, 25 pul and 50 pul used to be in circulation until the nineties. The coins used today were introduced in 2005 when they replaced the banknotes in circulation since 2002. Banknotes, which originally came in the value of 5, 10 and 50 afghani, were later joined by higher value banknotes. Today, the highest afghani banknote in circulation is 1000 afghani while the highest banknote in all the history was 10,000 afghani during the Taliban rule.
ACTUAL CURRENCY IN AFGHANISTAN
New, standardized currency was introduced after the fall of Taliban in 2002. There are 10, 20, 50, 100, 500 and 1000 afghani banknotes currently in circulation. Original 1, 2 and 5 afghani banknotes were replaced with coins in 2005. They come in different colours and sizes. The highest value banknote is 1000 afghani, which comes in orange colour. The Shrine of Hazrat Ali in Mazari Sharif and the Tom of Ahmad Shah Durrani are depicted on its obverse and reverse, respectively. Other banknotes come in blue (500 afghanis), violet (100 afghanis), dark green (50 afghanis), brown (20 afghanis) and yellow green (10 afghanis), depicting various national monuments and natural landmarks.
Most of the transactions in Afghanistan involve paying in cash. This is especially true in the remote areas of the country, open markets, bazaars and small food pantries. Payment by credit card will however be accepted in the five star hotels in Kabul or international stores. It is possible to withdraw cash (in afgani) from the ATM machines across the country. The most reliable ones are those associated with banks such as AIB (Afghanistan International Bank) which has branches in all major cities in the country. While some of the ATM machines have been reported as not accepting the foreign visa or master cards, the number of ATMs in Afghanistan is on the rise.
The rate of afghani has fluctuated a lot in the past decades. While in 1981, the official rate of exchange was fixed at 50 AFN for 1 U.S. dollar, inflation struck the country during the Soviet invasion. The inflation cause the afghani come down to 2400 AFS for 1 U.S. dollar. The situation stabilized after the fall of Taliban in 2001 since when the rate of new afghani, introduced in 2002, has remained rather stable. Currently, the rate is determined by the Afghanistan’s central bank.
The exchange rate of one U.S. dollar to one afghani is presently at $1 = 68 AFN, while for one euro around 76.5 AFN can be received.
It is recommended to the visitors to use only official exchange offices and banks to exchange money in Afghanistan as using the black-market exchange can result in reception of forged banknotes.
Haggling is a typical way to establish prices in Afghanistan. This is especially true in the village areas. Afghanis negotiate prices for virtually everything they buy, and the sellers expects tourists to do the same. Haggling is part of the culture, and good hagglers can end up buying goods at very competitive price. The art of bargaining can come handy when buying traditional work of Afghani artisans, such as rugs, kelims, or metalwork, be it muzzle rifles or ornate knives.
It needs to be remembered that foreigners are automatically thought to be very wealthy, and the initial price will automatically reflect on the image seller has about the nationality of his potential customer. The initial price by no means determines the final price of the product. Negotiating price for the desired article is a process which make take some time, good mood and willingness to engage in this process is therefore essential. When haggling, the potential customer should establish the maximum price he is willing to pay for the article ahead of entering the price negotiation. Then, he should state his initial lower than his maximum, to show good will in rising the original offer. Ideally, the agreed price should be somewhere in the middle, between the initial price of the seller and the first price offer of the buyer.
The process of negotiation can take hours if the product concerned is of higher value. It can be viewed as a great opportunity to experience Afghani culture first hand as great deal of personal information tends to be shared by the sellers during the process as to convince the customer to buy at higher price. Once the price is agreed, the client should not hurry but accept an invitation to drink coffee with the merchant. An invitation to share a meal can likewise be offered.