The Voice News ;KABUL, May 23 (Reuters) – The Taliban-led administration is in advanced negotiations with Russia to facilitate trade settlements in local currencies, aiming to reduce dependence on the U.S. dollar as both countries continue to grapple with Western sanctions.
Afghanistan’s Acting Commerce Minister, Haji Nooruddin Azizi, said in an interview that the Afghan government has also proposed similar arrangements with China. Initial discussions have already taken place with officials at the Chinese embassy in Kabul, signaling growing regional efforts to establish alternative financial systems that bypass the global dollar-dominated economy.
Currently, Afghanistan trades about $300 million worth of goods annually with Russia, primarily involving oil, wheat, and other essential commodities. With international sanctions limiting access to the global banking system and a sharp decrease in Western financial aid since the Taliban’s return to power in 2021, the country is seeking ways to stabilize its economy and ensure continued trade flows.
“Sanctions have made U.S. dollar transactions increasingly difficult. We are now working with countries like Russia and China to establish banking mechanisms in national currencies like rubles, yuan, and afghanis,” Azizi stated. “This would make trade more convenient and reduce our reliance on informal money exchanges and intermediaries.”
Azizi also emphasized that moving toward local currency trade aligns with broader goals of regional economic integration. “Afghanistan wants to become a bridge in regional connectivity, especially in trade between Central Asia, South Asia, and China. But for this, we need reliable financial channels,” he added.
Since the U.S. withdrawal and the subsequent collapse of the previous Afghan government, the Taliban have faced growing economic pressure. Billions of dollars in foreign reserves remain frozen, and international banking institutions are cautious about engaging with Afghanistan due to the risk of breaching sanctions.
In the absence of formal banking channels, many Afghan businesses have turned to hawala systems—informal money transfer networks that are less transparent and carry risks of abuse. The proposed trade agreements with Russia and China could provide a more structured and accountable alternative, potentially boosting investor confidence and ensuring greater economic stability.
Moreover, Azizi mentioned that Afghanistan is exploring barter trade options, especially for vital goods like fuel, construction materials, and machinery, which are in high demand as the country attempts to rebuild.
Russia, for its part, has been expanding trade in rubles with several nations facing Western sanctions, while China continues to push for internationalization of the yuan as part of its global Belt and Road Initiative. Afghanistan, given its strategic location and growing trade ties, is seen as a potential partner in these efforts.
“We’re not just looking to survive,” Azizi concluded. “We want to grow and be self-reliant, and diversifying our trade and financial partnerships is a critical step in that direction.”