US dollar rate in Pakistan declined by 0.60 rupees and now set at Rs288 in the open market following a massive crackdown by FIA teams against currency smugglers. The interbank rate also decreased to Rs284.80, down from the previous rate of Rs285. The drop is the result of raids in major cities, against hoarding of dollars and illegal exchanges of currencies.
The dollar value appreciation in recent days caused angry outbursts of citizens citing non-availability of US dollar, Euro, and British Pound at exchange companies. The State Bank of Pakistan (SBP) met with currency dealers. The ISI and other institutions were also present.
Chairman Exchange Companies Association of Pakistan (ECAP), Malik Muhammad Bostan, along with members, met DG-C ISI General Faisal Naseer in Islamabad. He briefed that the dollar rate increasing due to foreign currency smuggling to Iran and Afghanistan. Bostan revealed that agents positioned outside legal currency exchange outlets were diverting customers to the black market by offering higher rates.
Bostan also pointed to the new FBR policy imposing tax on cash purchases over Rs200,000, causing non-filers to buy and hoard dollars through unofficial channels to avoid identification. This resulted in reduced dollar availability at legal exchanges.
Bostan asked the government to waive on the taxes of cash purchases of up to 2,000 dollars by the citizens, a similar move already taken by SBP circular. His point was to minimize demand in the black market and stabilize the rate of change.
General Naseer assured ECAP team that the case would further taken up with the government and he directed that even the smugglers of coins would taken into action immediately. This event said to have resulted in the organization of prime smuggling networks to go underground.
Malik Bostan said that further fall in the dollar rate of Rs 250 per dollar may take place in case the crackdown on the operators of Hawala Hundi is going on. He instructed ordinary people to stop purchasing dollars and also urged those who are in possession of a dollar to sell it off as soon as possible because the Pakistani rupee already undervalued will get weaker.
Bostan added that over the past nine months, the SBP purchased $9 billion from the interbank market, boosting foreign reserves to $20 billion. Since the SBP now stopped buying dollars, further appreciation of the rupee expected.
