Development of monetary policy in Afghanistan

The main purpose of this study is to give an overview of monetary policy and the aims of monetary policy implemented in Afghanistan and to analyze the historical development and change of monetary policy instruments used within the framework of these purposes. The subject of the study is the development of monetary policy in Afghanistan. In addition, the aim of this study is to investigate the main causes of the problem of the decrease in the value of money and the increase in prices, which are among the most important problems of Afghanistan, to investigate the effects of the practices and monetary policies on the country to reveal how successful these policies have been. It is also one of the objectives of our study to investigate how the monetary policy practices in Afghanistan benefit Afghanistan, to what extent they affect the value of money, the solutions to ensure sustainable growth, the appropriate working area to reduce unemployment and the solution to the decrease in inflation. By dividing the monetary policy instruments implemented in Afghanistan into two parts, by briefly summarizing the first part before 1980, then by examining the monetary policy objectives after 1980, especially after 2003, the monetary policy, inflation, unemployment, GDP and exchange rate used by the Afghanistan Central Bank in recent years effects on it are tried to be explained. This study consists of four parts. The first, second and third chapters are examined theoretically. In the fourth part, the variables of inflation, unemployment, GDP and exchange rate in the Afghanistan economy are examined. In this study, the ordinary least squares method is used to obtain the relationship between the variables. In addition, the OLS method was applied to make the regression equations of the research. But before that, Unit root test was performed to know the stationarity of the data. In this study, 17 years of data between 2003 and 2020 were used. These analyzes were performed using Eviews 9. From this study, we determined that the monetary policy followed by the central bank in 2003-2020 was not effective. It only affects the exchange rate, not inflation, unemployment and economic growth.