Monetary Policy Formulation and Implementation

The central bank's monetary policy is formulated and adopted by the Monetary Policy Committee. The committee comprises the DAB Governor, the First Deputy Governor, and other members of the Supreme Council. The chairman of this committee is the Governor of DAB, with the First Deputy Governor serving as the deputy. The remaining members of the Supreme Council serve as members, while the Director General of Monetary Policy serves as the Secretary of the Committee.

The Monetary Policy Committee is responsible for determining the country’s monetary and exchange rate policies, which are typically decided during meetings of the Supreme Council of DAB.

In general, the committee is tasked with decisions on establishing the framework and operational objectives of monetary policy, approving quantitative targets, determining Afghanistan’s exchange rate regime and foreign exchange arrangements, setting monetary policy instruments and the scope of their use, and establishing the required reserve ratio for commercial banks.