The state-owned Central Bank of Afghanistan has for the first time issued licenses to two foreign exchange companies amid reports that the bank has not been able to control the use of foreign currencies on the local market.
The head of the central bank’s licensing department, Abdul Waheed, said at a conference in Kabul that the use of Pakistani and Iranian currencies on local markets is concerning and that the bank is not able to overcome this problem alone.
Waheed said the bank does not know the exact number of foreign exchange businesses in the country but to date more than 1,800 of them have registered with the bank.
“The total number of money exchangers (they know about) in the country is 1,810. Of this, 1,090 companies have registered (with the bank),” he said.
According to the Central Bank, the two new licensed business will not be able to offer savings accounts to its clients or to give them loans. Instead they will be able to exchange foreign currency and offer money transfer services.
The owners of these companies said they have plans to expand operations to towns and cities around the country.
“Within the next five years we will have more than 50 branches in every nook and cranny around the country,” said Mohammad Bashir, head of Al-Bashir Exchange.
“Money services businesses have been digitalized, computerized and modernized for today’s world. This should be done in Afghanistan too,” said Jarullah Mansouri, CEO of Exchange Zone.
This comes as the Central Bank says in order to improve the country’s money system, it is trying to legalize the activities of money exchangers across the country.