Afghan currency is stronger than Indian Rupee, here is the reason behind it

The Indian currency is under significant pressure these days. The rupee is steadily declining. Last Friday, the Indian rupee once again hit a record low, surpassing 90.50. 

Amidst the Indian currency's weakness, the Afghan currency has also come under discussion because its currency is stronger than India's. 

Yes, you might not believe it when you first hear it, but this is the truth. Afghanistan's currency is stronger than India's. Let's find out why its currency is so strong.

Afghanistan's currency is the Afghan Afghani, which is currently worth 1 rupee 38 paise in Indian rupees. This means that if you earn 1 lakh rupees in Afghanistan today, the value of that 1 lakh rupees will become 1 lakh 38 thousand rupees when it comes to India. However, it is important to understand whether Afghanistan's currency is strong, or appears strong, under Taliban rule.

Why is the Afghan currency strong?

After coming to power in 2021, the Taliban banned the use of the US dollar and Pakistani rupee in Afghanistan. The absence of foreign currency has created a lack of demand for it. 

The government has restricted transactions to local currency and imposed strict controls on imports and exports. Since international trade and investment are extremely limited, the Afghan currency is not subject to external pressure. 

The country's economy is currently confined to a small and closed range, where currency demand and supply are roughly balanced. This is why the Afghan currency appears stable.

However, it's important to understand that a strong Afghan currency doesn't necessarily mean a strong economy or a strong GDP growth compared to India. The currency is in good shape because foreign currencies aren't in circulation and trade is controlled.