Information about currency: Afghani

The first Afghani was introduced in 1925. In addition to being subdivided into 100 pul, 20 afghani were equal to one amani. The rate of conversion from the rupee is sometimes quoted as 1 afghani = 1 rupee 6 paisa, based on the silver contents of the last rupee coins and the first Afghani coins. The Afghani initially contained 9 grams of silver.

Except during World War I Afghanistan's foreign exchange rate has been freely determined by market forces. However, for some periods, a dual exchange rate regime existed in Afghanistan: an official exchange rate which was fixed by the Afghan Central Bank, and a free market exchange rate which was determined by the supply and demand forces in Kabul's money bazaar called Saraye Shahzada. For example, in order to avoid the seasonal fluctuations in the exchange rate, a fixed exchange rate was adopted in 1935 by the Bank-e Milli, which was then responsible for the country's exchange rate system and official reserves. Bank-e Milli agreed to exchange afghanis at 4 Afs against 1 Indian rupee in 1935. After the establishment of Da Afghanistan Bank as the Central Bank of Afghanistan, such a preferential official fixed exchange rate continued to be practiced. Although Da Afghanistan Bank tried to keep its official rate close to the Saraye Shahzada's exchange rate, the gap between the official and free-market exchange rates widened in the 1980s and during the civil war.

Since 2002, Da Afghanistan Bank has adopted a floating exchange rate regime and has let the exchange rate to be determined freely by market forces.

Between October 7, 2002, and January 2, 2003, a new afghani was introduced with the ISO 4217 code AFN. No subdivisions have been issued. It replaced the previous afghani at two distinct rates. Issues of the government of President Burhanuddin Rabbani were replaced at a rate of 1000 to the new afghani, whilst the issues of Abdul Rashid Dostum (the Northern Alliance) were replaced at a rate of 2000 to the new afghani. The new afghani was valued at 43 afghani to the U.S. dollar. Prior to the reissue, there were more than 15 trillion afghani in circulation after unrestrained printing under Taliban rule and during wars and occupation.

In October 2003, Afghan Central Bank governor Anwar Ul-Haq Ahadi announced that Afghans should use their own afghani currency in daily transactions rather than United States dollars or Pakistani rupees. This was in preparation for October 8 when all prices in the Afghan marketplace were to be specified in afghani.

On 7 October 2002, banknotes were introduced in denominations of 1, 2, 5, 10, 20, 50, 100, 500, and 1000 afghanis. The 1, 2 and 5 afghani notes were replaced by coins in 2005. In 2004 and 2008, the security features on several denominations were improved.