KARACHI: JEE News reported on Tuesday quoting foreign currency dealers that the Pakistani currency is under pressure due to ongoing political unrest in the country and smuggling of US dollars into Afghanistan.
Pakistan is currently dealing with problems on many fronts, political crisis being the first and foremost. The dollar crisis is also linked to it,” said Malik Bustan, chairman of the Exchange Companies Association of Pakistan (ECAP) at a news conference.
About $2 billion goes to Afghanistan from Pakistan through official and unofficial trade, misuse of Afghan transit trade, smuggling and border crossings, Bostan said, adding that these factors are putting a strain on Pakistan’s foreign exchange reserves.
At present, Pakistan’s economy is suffering irreparable damage due to Afghan transit trade, which has increased significantly. He added that a large part of the dollars going from Pakistan to Afghanistan passes through the Afghan transit trade, and both Afghan and Pakistani businessmen are involved in this anti-national activity.
To reduce the import bill, the government imposed higher duty on many luxury goods.
“Our traders and importers wondered why they should pay 200% duty to the Pakistani government,” Bostan said, adding that they run a global network, with hubs in Dubai, London, Europe, the US, Saudi Arabia. Accept payments by reference. And everywhere.
They bring their goods here in the name of Afghan transit, go to Afghanistan through our port and then go back to Pakistan in small trucks. He said that many Pakistani importers who participate in this brutal practice not only fail to pay import duty, causing a loss of billions of rupees to the national exchequer, but also prevent dollars from entering the country. goes
When the Afghan Taliban installed a transitional government in August 2021, the Pakistani rupee was trading at 155, the country’s foreign exchange reserves were $22 billion, and its import bill was $4.5 billion. According to Bostan, today the rupee has fallen to around 225 per dollar in the interbank market and 235 per dollar in the free market.
He claimed that remittances of around 3 billion dollars are sent to Pakistan every month. Remittance flows have now reduced to $2 billion. “Where does this $1 billion a month go? Because we are paying remittances at Rs 225 for every dollar, that $1 billion a month goes to Afghan transit. Hawala/handi operators give 270 for every dollar. have been,” said the chairman.
Bostan said that currently there are only three major international companies with which the exchange companies have entered into money transfer agreements. “We have requested the SBP to allow exchange companies to negotiate partnerships with at least 50 leading global money transfer firms,” Bostan said.
“Exchange companies receive about $2 billion in workers’ remittances every year, and in terms of foreign exchange exports, these companies provided almost $3 billion to Pakistani banks last year,” he said. Exchange companies are playing a significant role in the stability of Pakistan’s reserve, the Pakistani rupee and the Pakistani economy by leaving it in the interbank market.
“If the government gives us an agreement with 50 international money transfer companies, the exchange companies can bring 7 to 8 billion dollars to Pakistan annually.”
