US Dollars are allegedly being smuggled to Afghanistan from Pakistan, Governor State Bank of Pakistan (SBP), Dr. Raza Baqir, has claimed.
Addressing the Leaders in Islamabad summit, Governor SBP said that Afghanistan’s accounts have been frozen by most countries due to the bleak economic situation in the war-torn country and there is an inadequate supply of US Dollars in the exchange markets along the Durand Line. As a result, it is suspected that US Dollars are being smuggled out of Pakistan.
Dr. Raza Baqir called on concerned Pakistani authorities to closely monitor the situation in the exchange markets along with the Afghan border and take relevant measures.
Depreciation of Pakistani Rupee
Governor SBP explained that the Pakistani Rupee depreciated due to the widening of the current account deficit.
The current account deficit was around $700 million per month before increasing in November 2016. It took more than 14 months to bring down the exchange rate and another 15 months after that to change the policy rate.
He added that when the current account deficit exceeds $700 million per month, it starts influencing the exchange rate adversely.
Since May this year, the exchange rate has witnessed a significant increase, resulting in a decrease in the current account deficit. If the exchange rate didn’t change in time, the current account deficit would have increased drastically.
Increase in Remittances
Governor SBP added that with an increase of $6 billion, remittances increased by 21% in the FY 2020-21 in comparison to the FY 2019-20.
He revealed that overseas Pakistanis are remitting their hard-earned money to their homeland at the same pace during the ongoing FY 2021-22 as FY 2020-21.
So far in FY 2021-22, overseas Pakistanis have remitted over $2.3 billion through more than 240,000 Roshan Digital accounts.
He claimed that remittances are only going to increase as nearly 2 dozen overseas Pakistani are opening Roshan Digital accounts with the SBP every day.
Increase in Exports
Governor SBP also said that Pakistan’s exports are increasing steadily and have crossed $5 billion so far during the FY 2021-22.
He also expressed hope that exports will only increase in the coming future thanks to the initiatives of the incumbent Federal Government during the previous three years.
