Exchange
Rate Policy (Annual)
In the light of Article 69 of the Da Afghanistan
Bank law, formulating, adopting and execution of exchange rate policy is one of
the main responsibilities of Da Afghanistan Bank. Among the eight exchange rate
regimes in the world, Da Afghanistan Bank adopted the Managed Floating Exchange
Rate regime. Under this exchange rate framework, the exchange rate is
determined on the demand and supply factors.
This exchange rate regime is adopted based on the
economic condition, balance of payments (exports and imports), and taking into
account the degree of openness of the economy (currency inflow and
outflow). Under this framework, DAB does not target the exchange rate.
Meanwhile, considering the negative impacts of the exchange rate fluctuation on
the investors, consumers, and other economic agent’s expectations as well as
the level of overall domestic prices, the central bank monitors the
exchange rate behavior and puts its efforts to prevent serious fluctuation in
the exchange rate.
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