New Delhi, Oct 10 (IANS): A number of money changers in Kandahar said they see an increase in smuggling of US dollars out of Afghanistan to some neighbouring countries, mainly Pakistan, raising alarm that it will further affect the fragile economic situation in the country if it continues, Tolo News reported.

They said that "millions of Pakistani rupees" are brought in to Kandahar from Pakistan and are exchanged to US dollars and are taken back to the neighbouring country, the report said.

The money changers said the demand for the US dollar is increasing in the market and that most of their customers buy the US currency by selling Pakistani rupees.

They said newly imposed restrictions on dealings involving the US dollars in Pakistan have caused an increase in the smuggling of dollars out of Afghanistan to the neighbouring country.

"Some Pakistani investors buy the US dollars from markets and in exchange they inject Pakistani rupees into the markets," said Haji Babai, a money changer, the report said.

"There are many challenges... Nowadays, there is lack of dollar in the local market," said Haji Qandi Agha, a money changer in Kandahar.

This comes amidst an unprecedented fall of Afghani against the dollar over the last two months. Analysts said the smuggling of dollar out of the country is one of the reasons that Afghani's value is dropping.

"This problem in the long run can make an economic inflation in the country. Dollar smuggling should be stopped; otherwise, it will cause problems for the country," said Rahmatullah Pashton, a university lecturer.

Before the collapse of the former government, Afghanistan's Central Bank used to inject US dollars to the local markets to ensure the stability of Afghani. Recently, amidst a pause in international community's support to Afghanistan, the value of Afghani is descending against the dollar.