Mohammad Naser Moain

Abstract

This study is aimed to evaluate Afghanistan’s central bank’s policy toward selection and implementation of exchange rate regime since the establishment of new government. The research is mainly focusing to shed light on the reasoning behind the selection of current exchange rate regime and whether the central bank has succeeded to achieve its goal with the current regime.
Almost all the data used for the analysis was extracted from published reports, documents, bulletins of Da Afghanistan bank (DAB) and central statistical office (CSO) and international monetary fund (IMF). Mostly, descriptive statistic was applied for the detailed evaluation of the practicing exchange rate regime and its accomplishment.
The evaluation revealed that Afghanistan central bank has opted for managed floating exchange rate regime, after the introduction of new national currency. The selected regime could relatively be corresponded to the economic situation of the country. In Addition, central bank could succeed to introduce a relatively stable national currency in circulation and showed some degree of success in achieving price stability, building up a minor financial system from scratch and supporting economic growth in the country. However, the role of exchange rate regime could not be considered as significant as expected.

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