In a bid to stabilize the national currency, the Afghani, Afghanistan's central bank, Da Afghanistan Bank, auctioned $15mn on July 2. This move marks the second such auction in two weeks, as the bank continues its efforts to maintain currency stability amid economic challenges.
"The bidders, including moneychangers and private banks, should deposit the necessary money in cash in the form of Afghani in the central bank,"
the bank stated in an announcement posted on social media. This call for participation was extended to all eligible banks, foreign currency exchangers, and monetary service providers.
The Afghan central bank has been actively intervening in the currency market to prevent sharp fluctuations in the value of the Afghani. This auction is part of a series of measures taken by the Afghan caretaker government since it assumed power in August 2021. The government's economic strategy includes regular currency auctions to control liquidity and stabilize the exchange rate of the Afghani against foreign currencies.
Last week, the central bank auctioned another $15mn, reflecting the ongoing efforts to support the national currency. These auctions are critical in managing the monetary policy and ensuring that the Afghani remains relatively stable in a volatile economic environment.
By engaging moneychangers and private banks in these auctions, Da Afghanistan Bank aims to increase the participation of financial institutions in stabilizing the currency market.
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