In a move that is certain to cause further disruption to the Afghanistan economy that is already on the brink of collapse, the Taliban has announced a complete ban on the use of foreign currency in the country, warning that anyone who violates the order will be prosecuted.

The surprise move came hours after at least 25 people were killed and more than 50 wounded when gunmen attacked Afghanistan’s biggest military hospital after two heavy explosions at the site in central Kabul. 

"The Islamic Emirate (Taliban) instructs all citizens, shopkeepers, traders, businessmen and the general public to ... conduct all transactions in Afghanis and strictly refrain from using foreign currency," said Taliban spokesperson Zabiullah Mujahid in a statement.

"Anyone violating this order will face legal action," the statement further read.

Since the terrorist group seized power in mid-August, the national currency the Afghani has depreciated and the country's reserves are frozen abroad.

With the economy teetering banks are running short of cash and the international community has so far refused to recognise the Taliban administration as a government.

Many transactions inside the country are conducted in US dollars, and in areas close to southern border trade routes Pakistani rupees are used.

The Taliban government is pressing for the release of billions of dollars of central bank reserves as the drought-stricken nation faces a cash crunch, mass starvation and a new migration crisis.

Afghanistan parked billions of dollars in assets overseas with the U.S. Federal Reserve and other central banks in Europe, but that money has been frozen since the Islamist Taliban ousted the Western-backed government in August.

The departure of U.S.-led forces and many international donors left the country without grants that financed three quarters of public spending.

The finance ministry said it had a daily tax take of roughly 400 million Afghanis ($4.4 million).

Although Western powers want to avert a humanitarian disaster in Afghanistan, they have refused to officially recognise the Taliban government.