Wednesday, September 20, 2023
ISLAMABAD: Chairman Exchange Companies Association of Pakistan (ECAP) Malik Bostan hopes in the backdrop of government’s crackdown against hoarders, black marketeers and smugglers of dollars, the country’s remittances may increase by 10-20%.
Talking to The News, he said because of the crackdown the foreign exchange companies, which earlier used to get around $5 million per day, are now getting $15 million per day i.e., 200% increase. For the same reason, he said the interbank and open market dollar rate has considerably come down and now stands around Rs295. He assured if the crackdown continued, the dollar will come down to below Rs250.
Bostan disclosed the crackdown against hoarders, black marketeers and smugglers of dollars has also exposed a nexus between black marketeers and banking staff. Huge amount of dollars, he said, was stashed in lockers of different banks, and the bank staff in coordination with the black marketers, used these dollars for hawala/hundi. Keys of these lockers were with the corrupt bank staff members, Bostan said, adding upon receiving messages from black marketers concerned, they (bankers) used to do the illegal trading of US dollars.
The chairman of ECAP claimed several FIRs have been lodged against the bankers involved in this illegal activity.
Bostan said the illegal dollar business has also corrupted many importers and exporters. He explained there is a trend of over-invoicing among importers and under-invoicing among exporters only for the sake of dollars’ illegal trade. The importers through their over-invoicing send more dollars abroad, whereas the exporters through under-invoicing leave a considerable part of their dollars in foreign banks. This hurt Pakistan and its foreign exchange reserves, Bostan said.
He also pointed out how the dollars were smuggled to Afghanistan. He believed a permanent check on illegal dollar trade in all its shapes will help Pakistan boost its foreign exchange reserves.
Following the crackdown, which began on Sept 6 after a military leadership push, tens of millions of dollars have already been deposited into the country’s interbank and open markets. Pakistani rupee, which had plumbed record lows to Rs308 in interbank and beyond Rs330 in open market early this month, is in recovery mode and has come down to Rs295 in interbank and Rs296 in open market. This trend is expected to continue if the crackdown against illegal trade of US dollar continues.
According to Bostan, he had requested Army Chief General Asim Munir to take action against hoarders, black marketeers and smugglers of dollars. Before the crackdown, the vast majority of people were going to black market dealers.
Originally published in The News