The week-old caretaker government on Thursday decided on an all-out war against unlicensed foreign currency dealers to help curb the rampant rise of the US Dollar in the open market, which hit 317-318, a move that could backfire.
According to Express Tribune, interim Finance Minister Dr. Shamshad Akhtar during a high-level meeting sought a new strategy to deal with dollar smuggling, which authorities believe is one of the primary causes for the greenback’s explosive run against the Pakistani Rupee.
According to the report, officials representing the State Bank of Pakistan (SBP), the Ministry of Finance, the Federal Investigation Agency (FIA), Intelligence and Investigation (I&I) Customs, and other agencies attended the meeting.
The role of foreign exchange merchants in smuggling was brought up during the discussion. Central bank officials informed the meeting that unauthorized currency dealers were responsible for dollar smuggling and should be prosecuted. They further informed the meeting that over 50 licensed dealers with over 500 branches were functioning throughout Pakistan.
Consequently, the FIA decided to take action against the illegal traders. It is noteworthy that the security watchdog had previously adopted similar efforts to curb the issue but was unable to achieve the intended result.
The decision to crack down on unauthorized dealers was made yesterday after the PKR-USD interbank rate breached Rs. 300, a first for Pakistan’s economy amid extortionate dollar demand arising from import receipts, smuggling, and free-flowing financing of Afghan imports.
To note, smuggled Iranian goods such as diesel and edible oil, as well as the facilitation of payment gateways for Afghan trade, were major factors driving the increasing demand for US dollars. Meanwhile, payments for Iranian diesel sales at the Pakistani border were made in US dollars to Iran, which sank the PKR even further.
On a separate note, the age-old issue of concealed smuggling of rare precious stones, jewelry, and gold was also discussed during the meeting. Participants were briefed that apparently there was no trace of those involved in the smuggling of valuable stones from Pakistan. The meeting decided to create a policy to combat gem smuggling on a priority basis.
