December 28, 2022
2 mins read

Dollar smuggling to Afghanistan hurts Pak economy

Currently, Pakistan’s economy is suffering irreparable harm because of the Afghan transit trade, which has grown significantly…reports Asian Lite News

The Pakistani currency is under pressure owing to the ongoing political unrest in the country and the smuggling of US dollars to Afghanistan, media reports said on Tuesday.

“Pakistan is currently dealing with problems on several fronts, the political crisis being the first and biggest one. The dollar crisis is also connected with it,” Malik Bostan, the Chairman of the Exchange Companies Association of Pakistan (ECAP), said at a news conference, The News reported.

About $2 billion goes to Afghanistan from Pakistan in the form of official and unofficial trade, misuse of Afghan transit trade, smuggling and through the borders, claimed Bostan, adding that these factors are burdening Pakistan’s foreign exchange reserves.

Currently, Pakistan’s economy is suffering irreparable harm because of the Afghan transit trade, which has grown significantly. A significant portion of the dollars travelling from Pakistan to Afghanistan passes through the Afghan transit trade, and both Afghan and Pakistani traders are involved in this anti-national activity, he added, The News reported.

Photo taken with mobile phone on Aug. 22, 2021 shows trucks waiting to cross border at a border crossing point between Pakistan and Afghanistan, in southwest Pakistan’s Chaman. (Str/Xinhua/IANS)

To lower the import bill, the government imposed high duties on many luxury goods.

“Our traders and importers thought that why should they pay a 200 per cent duty to the Pakistani government,” Bostan said, adding that they operate a global network, accepting payments through hundi/hawala in Dubai, London, Europe, America, Saudi Arabia, and everywhere else.

“They bring their items here in the name of Afghan transit, travelling from our port to Afghanistan and then returning to Pakistan in small trucks. Numerous importers from Pakistan who participate in this atrocious practice not only fail to pay import duties, which costs the national exchequer billions of rupees, but also prevent dollars from entering the country,” he said.

When the Afghan Taliban established a transition government in August 2021, the Pakistani rupee was trading at 155, the country’s foreign exchange reserves were $22 billion, and its import bill was $4.5 billion. According to Bostan, today the rupee has fallen to almost 225 in the interbank market and 235 per dollar in the free market, The News reported.

He claimed that every month, about $3 billion in remittances were sent to Pakistan. The remittance flows have now decreased to $2 billion.

“Where does this monthly $1 billion go? Because we are paying remittances at 225 rupees for every dollar, this $1 billion per month has become the sight of Afghan transit. The hawala/hundi operators are giving those 270 for every dollar,” Bostan said.

ALSO READ: China’s renewed push to expedite BRI projects

Previous Story

Chinese team visits Kathmandu to study cross-border railway line

Next Story

Election Commission postpones Islamabad local body polls

Latest from -Top News

TIES WITH CHINA: Is Bangladesh Going Lanka Way?

Plans for nine Special Economic Zones, including Chinese-developed sites in Chattogram and Chandpur, promise jobs but risk creating enclaves where Beijing’s economic priorities overshadow Bangladesh’s….reports Asian Lite News On a humid March

Khaleda Zia’s Son Return Looms as Yunus Faces Heat

The core question remains whether Rahman can provide leadership in politically turbulent times in Bangladesh….reports Asian Lite News Speculation is mounting in Bangladesh over the possible return of Tarique Rahman, son of

India Eyes Top 5 Spot in Global Entertainment

With focused investments, policy support, and infrastructural upgrades, India is on track to position itself as one of the top five live entertainment destinations globally by 2030…reports Asian Lite News Fueled by
Go toTop

Don't Miss

More Misery as Petrol Prices Set to Soar in Pakistan

According to industry officials, the price of petrol is poised

Rockets land in Kabul as Ghani gives Eid speech

The incident reported minutes ahead of a speech by President