Afghan currency slides on bank collapse fears

Afghanistan's currency hit 100 to the US dollar Tuesday, losing five percent of its value in one day in a panic triggered by fears that one of the country's biggest banks could collapse, traders said.

Afghanistan has been hit by an enormous shortage of dollars since the Taliban marched into Kabul and seized power on August 15, as international donors suspended billions in aid provided annually to the previous regime.

Since the Taliban takeover, the US has frozen around 10 billion dollars in reserves that Afghanistan's central bank had parked in the US Federal Reserve.

The crisis looked set to deepen overnight and this morning when news circulated that Maiwand Bank -- among the country's five biggest lenders, according to traders -- had collapsed.

"That was false," said Haji Sher Shah Ahmadzai, who heads the dispute resolution committee at Kabul's Money Exchange Commission.