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HindustanTimes Fri,31 Oct 2014

World

Kabul stops forex trade with Iran
Reuters
Herat, October 05, 2012
First Published: 00:04 IST(5/10/2012)
Last Updated: 00:06 IST(5/10/2012)

Afghanistan has imposed a cap on US dollar flows across the border with Iran amid clashes there between Iranian police and protesters prompted by a collapse in the rial currency  Afghan police said on Thursday.

The Iranian currency’s plunge has also jolted traders in the western Afghan business hub of Herat city, where currency speculators and businesses have been hard hit by the rial’s slide.

It has prompted provincial authorities to limit to $1 000 the amount travellers can take out of Afghanistan  to be imposed on Afghan and Iranian travellers alike.

“We have tightened security in the border in the wake of rial falls and many complaints that Iranian currency is flowing in and dollars moving out,” General Sher Ahmad Maladani, head of the paramilitary Afghan Border Police in Heart, told Reuters.

“Amid the complaints that the Afghan and foreign currencies are flowing out of Herat, the government has imposed a $1,000 limit.”

It was not clear how Afghan police intended to enforce the limit along the porous border  which is crossed clandestinely by refugees  drug smugglers and even insurgents carrying arms into Afghanistan.

But Maladani said border police had already seized a suitcase containing 140,000 euros ($181 000) from an individual crossing into Iran.

In Iran, shops in Tehran’s Grand Bazaar stayed shut and police patrolled the area a day after security forces clashed with anti-government demonstrators and arrested money changers.

Traders told Reuters by telephone in Dubai that most stores were closed for safety reasons.

The rial’s fall has badly hit cross-border trade in Herat, one of Afghanistan’s wealthiest provinces, thanks to Iranian trade and where traders recently ran briefly out of US currency due to high demand.


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