AFG (Afghan Afghani)

The AFG, also known as the Afghan Afghani, is the official currency of Afghanistan. It is denoted by the symbol ؋ and has been in circulation since 1925. The Afghan Afghani serves as a medium of exchange and store of value within the nation’s financial system, facilitating economic transactions and promoting monetary stability.


The introduction of the AFG can be traced back to the establishment of the Bank of Afghanistan in 1931, which was tasked with issuing and managing the country’s currency. Initially, the AFG was pegged to the British Indian Rupee, but the exchange rate was later fixed to the United States Dollar (USD) in 1947. Since then, the USD has been the primary reference currency for the AFG.

Coins and Banknotes:

The AFG is divisible into 100 pul, although pul coins are currently not in circulation. Instead, banknotes are the most commonly used form of currency and come in various denominations including 1, 2, 5, 10, 20, 50, 100, 500, and 1,000 AFG. These banknotes feature notable Afghan historical figures, significant landmarks, and intricate security features to deter counterfeiting.

Exchange Rates and Regulation:

As an independent currency, the value of the AFG against other global currencies fluctuates in response to market forces. The exchange rates are determined by supply and demand dynamics, with intervention from the Central Bank of Afghanistan (Da Afghanistan Bank) to maintain stability. The bank monitors and regulates the foreign exchange market to manage inflation, stabilize prices, and promote economic growth.

Usage in Finance and Business:

The AFG is the legal tender within Afghanistan and is widely accepted for day-to-day transactions, both in urban areas and rural regions. It plays a crucial role in all aspects of financial operations, including billing, accounting, corporate finance, business finance, bookkeeping, and invoicing. Individuals and businesses are required to maintain accurate records of transactions, denominated in the local currency, for taxation and auditing purposes.

Foreign Exchange:

For international trade and investment, the Afghan Afghani is often converted into other widely used currencies such as the USD, Euro, or British Pound. Foreign exchange markets enable the conversion of AFG to these currencies, facilitating cross-border transactions and providing liquidity to businesses engaged in international trade.

Challenges and Future:

Like many developing nations, Afghanistan faces challenges to ensure the stability and widespread acceptance of its currency. Political instability, weak economy, and ongoing conflicts have had an impact on the Afghan Afghani’s value and circulation. Nevertheless, efforts are being made to improve the country’s financial system, including strengthening the regulatory framework, enhancing infrastructure, and fostering economic growth, which can contribute to the stability and growth of the AFG.

In conclusion, the AFG (Afghan Afghani) serves as Afghanistan’s official currency, facilitating economic transactions and acting as a store of value. It plays a vital role in financial operations and is integral to various sectors such as finance, business, billing, accounting, and invoicing. Despite challenges, ongoing initiatives aim to ensure the stability and future growth of the Afghan Afghani within Afghanistan’s financial system.

This glossary is made for freelancers and owners of small businesses. If you are looking for exact definitions you can find them in accounting textbooks.

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