IEA tightens currency controls after dollar smuggling report

The Islamic Emirate of Afghanistan (IEA) imposed fresh restrictions on people carrying foreign currency out of Afghanistan, in a rare directive from the prime minister’s office.

The restrictions were imposed after a report published in Bloomberg stated that millions of dollars were being smuggled into the country each day from Pakistan.

Tuesday’s order from Mullah Mohammad Hassan’s office spelled out new currency limits clearly for the first time and laid out new punishments — up to a year in prison. While a $5,000 limit was already in place, the new edict added that the amount people could take out via road border crossings was now only $500 and barred the transport of gold or precious stones out of the nation.

“If someone transfers a million dollars, he will be imprisoned for a year, and for one hundred thousand dollars, he will be jailed for a month and for less than the amount, he will receive ten days in jail,” the edict said.

The IEA also reiterated that bringing in foreign currency is “prohibited,” without specifying how much and under what circumstances. Before the report’s publication, the Afghan Finance Ministry had said that it encourages individuals to bring in any value of foreign currency.

Bloomberg reported Tuesday that traders or smugglers are bringing as much as $5 million into Afghanistan from Pakistan every day, which was providing some support for the country’s squeezed economy after the US and Europe denied the IEA access to more than $9 billion in foreign reserves.

However, the illicit dollar inflow into the country is exacerbating a rapidly developing economic crisis in neighboring Pakistan.

Economic experts consider this work of the Islamic Emirate to be important for maintaining the financial stability and value of the afghani currency, and they say that governments have an obligation to support their currency value.