A money changer at the Shahzada Market.

KABUL, Afghanistan - Amid the knee-high stacks of worn and smelly currency exchanged at the crowded Shahzada Market, a trader came forth the other day carrying a brick of brand-new Afghan notes, still shrink-wrapped from the printer, bearing a production date in July.

In a country devastated by war, where the control of Kabul changed hands a mere three weeks ago, it is impressive that new notes professing to carry the full faith and credit of Afghanistan's central bank still manage to find their way into the market.

There's just one hitch: The Afghanistan National Bank has not issued any new currency in more than five years, since the Taliban took over Kabul.

"When the Taliban came here, there was no new money printed for them," said Ullah Mohammed Fayez, general secretary of the bank. He said the Taliban did little with the bank except clean out $6 million from its vaults on Nov. 12, the night before Northern Alliance forces marched into the capital.

"All the currency we're dealing with comes from somewhere else," Fayez said. "You'll have to ask the money changers where."

It's an open secret in the money bazaar: Afghanistan's currency comes from Russia.

Although the Taliban controlled the central bank headquarters for five years and just a month ago occupied 90 percent of Afghanistan, the Islamic militants never managed to master the country's money supply.

That remained in the hands of the Northern Alliance, the coalition of anti-Taliban forces that recaptured much of the country in recent weeks.

The exiled government of President Burhanuddin Rabbani, ousted from Kabul in 1996 but still recognized by much of the world, never relinquished its right to print Afghan currency. Whenever it needed to pay its bills, Rabbani's government went to its printer in Russia and ordered up a new batch of afghanis - "afs" for short.

The Taliban attempted to wrest control of the money supply by banning the exchange of any afs with new serial numbers. The alliance responded by printing new notes with old serial numbers - effectively counterfeiting its own currency. In some cases the same serial number appears on as many as three notes.

"We just printed the money with the old serial numbers," said Sayedalla Hashami, 44, a Rabbani adviser who was just appointed the central bank's interim governor. "It gave the Taliban a sign: You think you're smart? We're also smart."

'We can tell'

Too many smart people has made for a lot of confusion. The central bank has no idea how much specie is actually circulating. "New money" - bills with high serial numbers - is only accepted in parts of alliance-held northern Afghanistan. "Old money" - often freshly printed with recycled numbers - is twice as valuable as "new" money and is accepted everywhere.

In addition, there are several subtle variations of "new" money printed by Gen. Rashid Dostum, warlord of the northern city of Mazar-e Sharif.

The hundreds of money changers crowded into three floors of the Shahzada Market can distinguish the different notes almost instantly as they count vast stacks of afghanis - the biggest note, valued at 10,000 afghani, is worth about 25 cents, so it takes thousands to add up to serious money.

"Even at a distance, we can tell the difference," said money changer Khwaja Mahmud.

The state of Afghanistan's currency is as muddled as its politics. It's a wonder anyone has any faith in it, but Afghans do: The afghani gained in value at the time of the Northern Alliance's military advance as traders became confident that peace was at hand.

A new batch

"There's no economics behind it," said Hasibullah Mowa, an economics lecturer at the University of Kabul. "It's all speculation."

Afghanistan's central bank ceased most functions in 1992, when mujaheddin ousted the Soviet-installed government of President Najibullah. Mujaheddin commanders issued so much new currency it touched off hyperinflation and panicked depositors. Foreign banks cut off contact, turning Afghanistan into a cash-only culture.

As factional fighting worsened, the national bank governor joined Gen. Dostum's renegade faction, and with his signature Dostum was able to order a new batch of notes from the Russian printer.

The banking system contracted further in 1996, when the Taliban captured Kabul and banned collecting and paying interest as blasphemy. With no loans and no savings accounts, the central bank only collected utility bill payments and tax and customs revenue.

The private sector stepped in to assume many banking functions. Businessmen lent one another money - no long-term or large loans but enough to cover operating expenses. Money changers offered foreign-exchange services, often providing cash to local residents after their relatives deposited cash to overseas accounts. The money changers even cashed checks written on overseas banks. The transactions were based on faith and handshakes.

The key to the informal banking system is the use of free-wheeling money markets, where afghanis are traded primarily for dollars or Pakistani rupees. One exchange is in Peshawar, Pakistan, the origin of much of Afghanistan's foreign trade. The other was established in downtown Kabul's Shahzada Market 70 years ago by a cousin of King Mohammad Zahir Shah and is still owned by his heirs.

Traders here expressed great faith in free-market forces and said the exchange rate responded quickly whenever the Northern Alliance attempted to flood the market with afghanis.

"The Northern Alliance had a deal with Russia to print money," said Amin Khosty, the head of the traders' association. "They spend it. Eventually it ends up here. There is no control, but if there are too many afs in the market, we know it almost immediately and the price goes down."

The currency market, however, responds fitfully to rumors and is easily manipulated.

Last week the rate fell after Russian troops arrived in Kabul. "Right now there are rumors the Russians brought money with them, so the value of the af is down," said Mahmud, a money changer.

The Taliban attempted to bring the exchange rate under control in 1998 by shutting the Shahzada exchange, but it was forced to declare defeat after a black market arose instantly - many currency traders simply did business at home, defying the government's fixed exchange rate.

In a final swipe at the market, the Taliban raided and looted 81 of 300 shops at the Shahzada exchange the night before the Northern Alliance arrived.

The financial interdependence of the Taliban government and the Northern Alliance helps explain why a vigorous trade was allowed to continue across front lines during the war. Goods and fuel from Taliban areas flowed across the lines, carried on donkeys, while animal skins, fruit, and newly printed currency flowed back.

Afghanistan's factions are now moving to create an interim government, and the draft agreement states that it will have the right to print currency.

"The new government will need to get rid of all this anarchy and confusion," said Fayez, the Afghanistan National Bank's general secretary, who wore a blue banker's suit that he brought out of his closet after five years of Taliban rule.

"There is only one solution: To get rid of all the money in circulation and print new notes," he said. "Of course, that is a very complicated thing to do."