Remittances sent before the directive and selected by the sender for dollar payout can continue to be paid in dollars, the source said.
Afghanistan’s central bank has ordered banks to pay out remittances in local currency only, the latest move to preserve scarce U.S. dollars, say sources familiar with the matter.
Hard currency remittances have formed an important source of external finance for Afghanistan over the years but dollar availability has dried up in the aftermath of the Taliban’s conquest of the country.
Western Union Co’s agent banking partners in Afghanistan received a directive from the country’s central bank in the last few days to pay out remittances in afghani only, said a source close to a money exchange provider.
Remittances sent before the directive and selected by the sender for dollar payout can continue to be paid in dollars, the source said.
MoneyGram International Inc said it was paying out in afghani only, without elaborating further. Both resumed money-transfer services to Afghanistan last week here, having suspended services in August after the Islamist militia captured Kabul.
Banks were told by the central bank last week to restrict withdrawals by corporate customers to local currency only, capped at around 20% of each customer’s weekly operating costs, said the banker.
With around 80% of banking deposits in dollars, bankers say controls should minimise the risk of insolvency.
Since re-opening in the second half of August, banks have been operating with limited services, including $200 weekly limits on withdrawals and few wire transfers.
