Following the United States led military intervention in Afghanistan in 2001, the Taliban regime collapsed and a new interim government was established, with a new constitution signed and elections subsequently held in 2004. This publication examines the progress made to rebuild Afghanistan's economy and key institutions in the post-conflict environment, as well as discussing the challenges that remain. Chapters consider a range of issues including: a review of the political landscape, aid assistance programmes and the role of the IMF; recent macroeconomic developments, including policies to tackle poppy cultivation and opium production; the fiscal framework and the budget, including the National Program for Reconstruction; structural reforms, including reforming revenue policy and administration, and revitalising the civil service; monetary and exchange rate policy, including the choice of exchange rate regime; and financial sector developments, including legal aspects, the position of the central bank Da Afghanistan Bank, commercial banking, and the informal hawala system.