Crackdown on Currency Smugglers Initiated

Law enforcement agencies in Pakistan have reportedly commenced a crackdown targeting individuals involved in foreign currency smuggling, intending to curb the illicit outflow of currencies, including US dollars, to neighboring nations such as Afghanistan and Iran.

According to Malik Muhammad Bostan, chairman of the Exchange Companies Association of Pakistan (ECAP), these operations have contributed to a degree of strengthening of the rupee against the US dollar.

In a formal statement, Bostan noted that this intervention assisted the domestic currency in appreciating by Re0.60, reaching Rs288 per US dollar during intraday trading in the open market on Wednesday.

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Bostan stated that teams from the Federal Investigation Agency (FIA), acting on confidential intelligence, executed extensive raids targeting currency smugglers, which resulted in a reduction in the dollar rate in both the open and interbank markets.

The local currency experienced a recovery of Re0.21 in the inter-bank market, closing at Rs284.76/$ on Wednesday, compared to its previous close of Rs284.97/$ on Tuesday, as per data from the State Bank of Pakistan (SBP). This daily gain was notably higher than the fluctuations observed in recent weeks and months.

Reportedly, this gain marked a relatively more substantial single-day recovery compared to typical fluctuations seen recently.

Bostan mentioned leading a delegation of currency dealers to Director General of Counter‑Intelligence (DGC) General Faisal Naseer at the Inter-Services Intelligence of Pakistan (ISI) in Islamabad on Tuesday.

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In response to inquiries regarding the escalating dollar rate in Pakistan, Bostan attributed the surge to currency smuggling operations directed towards Iran and Afghanistan, according to an ECAP statement.

He noted that the increased black market rates have led to a reduction in the supply of dollars available to legitimate currency dealers.

Subsequently, General Faisal Naseer promptly instructed law enforcement to undertake a crackdown on currency smugglers and apprehend those involved. As a consequence, the currency smuggling network has reportedly gone into hiding.

Bostan stated in the ECAP statement that sustained efforts by the FIA against currency smugglers and hundi-hawala operators could potentially lead to a further depreciation of the dollar, potentially ranging from Rs280/$ to Rs270/$, or even Rs250/$.