KABUL, June 26: In Kabul’s bustling open air currency market, men pull crude wooden carts piled high with sacks of local banknotes and exchange them at a nearby bank for just a few 100 dollars bills.

The porters had to carry even more loads on Wednesday after the afghani plunged in value, sending traders rushing to buy dollars and Pakistani “kaldars”, or rupees, to stave off further losses.

After weeks of stability, the afghani fell on Tuesday to 40,000 to the dollar from 34,000 a day earlier on a Reuters report that the currency would be restructured and revalued.

It regained some value on Wednesday, to stand at 39,000 or down about 15 per cent since Monday.

“There is more demand for dollars and kaldars than for afghanis,” said Morad Mohammad, a money trader sitting under a shabby umbrella to shade himself from the sun and frantically punching a small calculator during a transaction.

“Everyone wants to sell his afghanis because they think they will go down.”

Mohammad kept his precious dollars and other hard currencies locked in a glass box, while stacking relatively valueless afghanis on a mat on the ground beside a large pile of garbage.

The currency market, a magnet for peddlers of all kinds, sits on a dirt lot next to Kabul’s dried-up canal now turned into a vegetable market, where mounds of onion skins and rotten tomatoes float on a trickle of sewage.

The market was packed with traders on Wednesday as other peddlers joined professional money changers to cash in on the chaos of the past two days.

Afghanistan’s Central Bank Governor Anwar Ahady told Reuters on Tuesday of plans to introduce new banknotes with a value more than 1,000 times the present ones.

The move is part of efforts by the transitional government of President Hamid Karzai to establish monetary stability, seen as a prerequisite to attracting much-needed foreign investment.

Trying to keep the economy afloat while waiting for billions of dollars in foreign aid, the government has been selling millions of dollars in the market in the past months, hoping to keep the local currency from collapsing.

“Every time they announce plans to print new bank notes, the currency falls,” said money trader Gul Ahmad.

“There is also the issue of supply and demand. More afghanis are entering the country from Pakistan,” he said.

Hundreds of thousands of Afghan refugees have returned home in recent months, drawn by relative political stability under the US-backed transitional government.—Reuters