Kabul: In a significant escalation of ties between Afghanistan and Pakistan, the Taliban has banned the use of Pakistani Rupees in Afghanistan.

The ban on the Pakistani currency came into effect on Saturday, October 1, Afghan news agency Khaama Press reported.

It said the Taliban Intelligence Agency declared that the use of Pakistani Rupees in financial transactions in Afghanistan has been "completely banned."

This order was conveyed by the Taliban agency's anti-money laundering branch to the money exchange association. According to this order, all financial transactions, including but not limited to transfers, trade, and currency exchange, are disallowed.

The report said money exchange dealers are banned from conducting transactions totalling more than 500,000 Rupees. If more than the specified amount is discovered, the dealers could face legal action.

The Khaama report said this move comes at a time when some locals and traders in Afghanistan use Pakistani Rupees for everyday spending and food purchases.

Since the Taliban seized power in August last year, the relationship between the two sides has soured for several reasons, including increasing border clashes and the re-emergence of outlawed Tehrik-i-Taliban Pakistan (TTP) in Pakistan.

Recently, the Taliban had accused Pakistan of permitting its air space to be used by US drones to strike targets in the landlocked country.

Taliban claimed that Pakistan has received a whopping sum of money for allowing the US airstrikes in Afghanistan and added that they have substantial evidence to back their claims.

On July 31, the United States conducted a precision counterterrorism strike in Afghanistan that killed Ayman al-Zawahiri, Osama bin Laden's deputy and successor as leader of Al-Qaeda.

Meanwhile, Pakistan has blamed the Taliban regime for the resumption of attacks by the TTP which has aggravated the security situation in the country. Media reports said that the highest number of terror incidents in Pakistan in a single month this year was recorded in September.