Dollars being smuggled to Afghanistan

[Naveed Yaseen]

RIZWAN BHATTI
KARACHI (October 17 2008): The greenback is being smuggled in huge quantity into Afghanistan, which has primarily caused the decline in rupee value to the historic lowest level of over Rs 80 against the dollar. Besides, increasing the dollar demand by 100 percent to some 13 million a day in the open currency market, sources told Business Recorder on Thursday.

They said that now reverse trading of dollar has begun in the open currency market, as previously it was being imported from Afghanistan. The reason could not be ascertained tas to why the reverse trend took place. "Peshawar has become a major hub of dollar business, as it has touched a new exchange rate of Rs 86 on Thursday due to increased demand and low supply. In Afghanistan dollar is exchanged at PKR 88," they added.

Sources said that a large number of local and Afghani currency dealers are buying dollar in a huge quantity from Peshawar market and are smuggling them into Afghanistan adding, "from where the greenback is being transferred to Dubai- final destination."

They said that some 4-5 million dollars per day is being smuggled to Afghanistan, while the rising demand of dollar has also increased its value as against the other currencies. On Thursday dollar has traded at Rs 86 in the Peshawar market and likely to go further up in the near future.

Sources said that the State Bank of Pakistan has stopped the supply of dollar to the exchange companies due to the dollar smuggling to Afghanistan from Peshawar, as some companies were acquiring dollar at Rs 80 from central bank and selling at Rs 82-83 in the Peshawar market.

In addition, following the increasing demand in the open currency market, dollar per day demand has mounted by some 100 percent during the last fifteen days, sources said. They said per day dollar requirement in the open currency market was stood at 5-6 million, however with the huge buying by the masses and Afghani dealers, it has reached a new peak of 13 million.

Sources said that rupee depreciation in the interbank market was artificial, as there was no huge dollar required after the government's step to reduce the imports. The increasing dollar rate in the interbank market is directly affecting the open currency market, where dollar touched Rs 84 briefly on Thursday. During the last two days, rupee has depreciated by Rs 2 against the dollar in the interbank market and dollar was closed at Rs 82 on Thursday.

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