(Bloomberg) — Afghanistan’s central bank has banned online foreign exchange trading, declaring it “illegal” in Islam and warned that anyone engaging in it would face prosecution, a spokesman of the bank said.
“Da Afghanistan Bank considers online forex trading illegal and fraudulent, and there is no instruction in Islamic law to approve it,” Saber Mohmand said over the phone. “As a result, we have banned it.”
Since the Taliban returned to power last year, the economic collapse of the already-fragile nation had pushed many Afghans to turn to online forex or cryptocurrency trading, partly to preserve their money and keep it out of the group’s reach.
The bank has also tweeted a video showing two men in a boxing gym discussing how online trade in foreign currencies was against their Muslim faith. It’s unclear whether the central bank will also ban cryptocurrency trade in the country.
While there is no specific data on how many people trade forex online, Mohmand said that “millions of dollars” are traded daily, mainly by the currency traders in Sara-e Shahzada, the largest foreign exchange market in capital Kabul.
The announcement comes as the Taliban are struggling to fix an economy ravaged by international sanctions since they swept into power. Their global isolation has resulted in the nation losing the international aid that had previously accounted for more than 40% of Afghanistan’s GDP. The US has also blocked the central bank’s access to $9 billion in foreign reserves.
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