Walk through the crowded alleys of Kabul’s Sarai Shahzada and you’ll hear a sound that defines the modern Afghan economy. It isn't the roar of industry. It is the rhythmic, frantic rustle of paper—thousands of banknotes changing hands in the world’s most resilient open-air currency market.
Right now, the US dollar rate in Afghanistan is hovering around 65.50 AFN. If you looked at a chart from late 2021, when the rate spiked toward 124, you’d think you were looking at a completely different country.
Honestly, the strength of the Afghani (AFN) has baffled plenty of global economists. They expected a total freefall. Instead, they got a currency that outperformed the Euro and the Indian Rupee over certain stretches of 2024 and 2025. But don't let the surface numbers fool you. This isn't exactly a "booming" economy in the traditional sense; it’s a managed one, held together by aggressive central bank tactics and a very specific flow of foreign cash.
Why the US Dollar Rate in Afghanistan Defies Logic
Most people assume that because a country is under heavy sanctions, its currency must be worthless. That’s usually how it works. But Da Afghanistan Bank (DAB)—the country's central bank—has been playing a high-stakes game of supply and demand.
Basically, they keep the Afghani scarce.
They do this through regular dollar auctions. Just this week, on January 13, 2026, the central bank maintained its strategy of injecting liquidity to keep the rate stable. When the AFN starts to slip, the DAB auctions off $15 million or $20 million to local money changers and commercial banks. It’s a simple lever. By pulling dollars out of the vault and soaking up excess Afghanis from the market, they keep the exchange rate from spiraling.
But where do those dollars come from?
A huge chunk of the stability rests on the shoulders of UN-led humanitarian shipments. Since 2021, planes have been landing in Kabul carrying physical crates of US cash. This money isn't for the government; it’s for aid. Yet, once that cash hits the market to pay for local services, rent, and salaries, it becomes the lifeblood of the exchange rate.
The Sarai Shahzada Factor
You can't talk about the US dollar rate in Afghanistan without mentioning Sarai Shahzada. This isn't some sterile Wall Street trading floor. It’s a multi-story labyrinth in the heart of Kabul where hundreds of dealers shout prices over the phone.
These dealers are often faster than the official bank feeds.
If there’s a rumor of a border closure at Torkham or a new decree from Kandahar, the rate moves in seconds. It is pure, raw capitalism in a place where traditional banking is mostly broken. Most Afghans don't use apps to check the rate; they call their "sarraf" (money changer).
Factors Moving the Needle in 2026
The exchange rate doesn't exist in a vacuum. A few key things are currently tugging at the value of the dollar in the local markets:
- Trade with Neighbors: Afghanistan imports almost everything—flour from Kazakhstan, fuel from Iran, electronics from China. All of this requires hard currency. When imports surge, the demand for the USD goes through the roof.
- The Ban on Foreign Currencies: The local authorities have been incredibly strict about "Afghani-only" transactions. In many provinces, if you're caught using Pakistani Rupees or US Dollars for groceries, you’re in trouble. This forced demand for the AFN is a massive reason why the rate hasn't collapsed.
- The Global Dollar Index (DXY): On a macro level, the US dollar itself has been on a weird path globally in early 2026. With the Fed juggling interest rate cuts and US domestic policy shifts, the "greenback" isn't the untouchable titan it was two years ago.
The Brutal Reality of a "Strong" Currency
Here is the kicker: a stable US dollar rate in Afghanistan doesn't mean life is easy.
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In fact, it’s kinda the opposite. While the currency looks strong on a graph, the "real" economy—jobs, manufacturing, exports—is still struggling. Most families are dealing with what's called "liquidity preference." They hold onto whatever cash they have because they don't know if the banks will let them take it out tomorrow.
Prices for basic goods like cooking oil and rice are still high. Even if the dollar rate drops, shopkeepers are notoriously slow to lower their prices. They remember the 124 AFN days. They’re hedging their bets against the next crisis.
What to Watch Next
If you are tracking the rate for business or remittances, stop looking at the annual charts and start looking at the weekly auction announcements from Da Afghanistan Bank.
Those auctions are the only thing preventing a massive correction. If the UN aid shipments were to stop or if the DAB ran out of physical dollar reserves, the 65.50 rate would likely be a memory within 48 hours.
For now, the strategy is "stability at all costs." The authorities know that a collapsing currency leads to riots and total loss of control. So, they will keep auctioning, keep banning the use of Rupees, and keep the Afghanis scarce.
Actionable Insights for 2026
- Time Your Transfers: If you are sending money via Western Union or Hawala, watch for the mid-week DAB auctions. Rates usually stabilize or slightly improve for the AFN immediately after an injection of $15-20 million.
- Monitor Border Status: The rate is highly sensitive to trade. Keep an eye on the Torkham and Spin Boldak crossings. Closures mean less demand for dollars to pay for imports, which can temporarily strengthen the AFN, even if it hurts the broader economy.
- Diversify Holdings: For those on the ground, keeping a mix of AFN for daily expenses and USD for long-term savings remains the only logical move. The current stability is "artificial" in the sense that it relies on external aid flows that could be cut by a single political decision in Washington or New York.
The Afghan economy is a paradox. It is a place where a "strong" currency lives alongside a humanitarian crisis. Understanding the US dollar rate in Afghanistan requires looking past the numbers and seeing the political levers being pulled behind the curtain.