Afghanistan’s Taliban-led government is in talks with both Russia and China to begin trading in their local currencies, Reuters reported on Friday, citing Afghan Minister of Commerce Nooruddin Azizi. The effort seeks to reduce dependence on the US dollar as both countries navigate Western sanctions and economic isolation.
Talks with Russia are apparently in “advanced” stages, with plans to allow Afghan and Russian banks to handle transactions worth hundreds of millions of dollars without relying on international dollar transfers.
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According to Azizi, talks are ongoing with China to establish a similar system. A joint working group with members from the Afghan Commerce Ministry and the Chinese embassy has been formed to that end.
Following the 2021 Taliban takeover, Afghanistan’s financial system was largely cut off from global banking networks. The country has since relied on deals with Russia for essential goods like oil, gas, and wheat. After US President Donald Trump cut off more than $1 billion in foreign aid to Afghanistan upon starting his second term, Afghanistan found itself in even more dire economic straits. Kabul is now seeking alternative trade arrangements to stabilize its economy.
In September, the Taliban requested to attend the BRICS summit, a meeting of major economies including Russia and China that has worked to reduce global reliance on the dollar. Russia recently moved to remove the Taliban’s listing as a terrorist organization and China hosts an ambassador from the Taliban, although neither country formally recognizes the Taliban government.