December 6, 2001	Thursday	Ramazan 20, 1422

KABUL, Dec 5: The Afghani currency soared more than 10 per cent in Kabul’s unofficial money markets on Wednesday on news that the inter-Afghan talks in Germany had confirmed Pashtoon royalist Hamid Karzai as Afghanistan’s new prime minister.

The Afghani jumped to around 32,000 to the dollar, from 35,000-36,000 on Tuesday, as thousands of people pushed their way into the overcrowded Sara-e-Shazada market rushing to sell dollars.

Dealers said business was up 50 per cent and foresaw the dollar falling to as low as 20,000 Afghanis by December 22 when the change of power takes place.

“The price will come down day by day. If there is peace it will come down much, may be 26,000 even 20,000,” said Abdul Saboori, tapping at his calculator while taking guidance from a BBC news bulletin giving details of the Bonn talks.

The money changers of Kabul are as well versed in currency markets as any dealer on Wall Street or in London, and have been closely following the negotiations in Germany.

Unlike other countries where the value of the currency is affected by imports and exports, the Afghani is influenced by the level of chaos in the country and dealers stand or fall on calling it right.

“Politics will dictate the rate and it will depend on how the Karzai government performs,” said Merwise, offering the Afghani at 32,200 to the dollar, compared with 35,500 on Tuesday.

On November 12, the day before the Taliban fled from Kabul, driven out by a combination of the US air strikes and Northern Alliance ground forces, the Afghani was at 67,000 to the dollar.

“Right now people feel there is going to be peace and the dollar is falling,” Merwise said.

“But the Bonn accord could easily fall apart and the Afghani will fail again.”

Like the other 3,000 traders at Sara-e-Shazada, Merwise all too clearly remembers when the Afghani plunged as low as 75,000 during past crises in a country ravaged by war for more than two decades. It has also been as high as 300.

“Of course I am making money today. But remember sometimes we win and sometimes we lose,” said Saboori, for whom speculating on the fluctuations of the Afghani is a way of life and who was offering the Afghani at 32,000.

“If there was no agreement and everything was bad, the price would have been about 50,000 today.”

Ten minutes later, Ahmad Zia went below the 32,000 benchmark to 31,500.

Weighed down by bundles of notes, which look far more valuable than they really are, he said he had served 80 customers in three hours, compared to about 50 the previous day.

“Everyone wants to cash in their dollars before the afghani gets too high,” he said.

There is no trusted banking system, and the few financial institutions that do exist in Afghanistan have been systematically plundered during the past 20 years of warfare.

Three weeks ago, the governor of Nangarahar province allegedly emptied the entire cash reserve of the central bank of Jalalabad before fleeing to Pakistan.—AFP