The extraordinary lack of dollars in the country at the moment tells that there are hundreds of millions of dollars smuggled from Pakistan to Afghanistan every day. According to the US broadcast channel, Bloomberg millions of dollars are being smuggled from Pakistan to Afghanistan every day, which is boosting Afghanistan’s economy. On the other hand, Pakistan’s economy is losing crores of rupees. Dollar smuggling has become normal in recent times which is boosting the shrinking economy of Afghanistan to some extent.
This all is happening despite the US and Europe refusing to give access to billions of dollars of foreign exchange which were in international banks. However, it is an alarming situation for Pakistan because it is creating an economic crisis here.
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Exchange Companies Association of Pakistan Report
According to its report, Pakistan’s Secretary General Muhammad Zafar Paracha claimed that businessmen and smugglers are smuggling 5 million dollars on the daily basis. He also claimed that every week central Bank of Afghanistan collects 7 million dollars from the market. This illegal smuggling of dollars depicts how the Taliban government are overcoming its economic sanctions since 2021. This smuggling is putting huge pressure on Pakistan’s economy and the rupee is devaluing to its maximum level since its independence of Pakistan. It is making Pakistan closer to getting default.
Currency dealer Muhammad Zafar Paracha claimed that undoubtedly, the currency is being smuggled to Afghanistan. It has become a business in which people do to become rich in a few days.
Alpha Beta Core Solution Pvt. Ltd & Central Bank Report
Chief Executive Officer of Alpha Beta Core Solution Private Limited said that Afghanistan needs 1-1.5 crore daily. And half of this amount is being smuggled from Pakistan. A translator from the Central Bank of Afghanistan told that to boost the economy of the country, foreign exchange reserves are very low.
According to a report that Afghanistan is receiving 4 crore dollars from the United Nations weekly. As we know that Afghanistan is not linked with Global Banking System, so it gets hard cash in dollars. These dollars are transformed into local currency.
Ex Fund Advisor of the IMF said that the UN supplies dollars in the market and change them into the local currency. This boosts the economy of Afghanistan. Therefore, the demand for Afghan currency was increased by the UN. There also include other resources, i.e dollar smuggling.
According to a report, because of the supply of dollars and demand for the local currency has increased its value and it has become 89.96 Afghan currency per dollar. This was 124.818 in December 2021. On the other hand, the Pakistani currency has devalued to 37% against the dollar.
According to another report, till the end of January Pakistan’s currency got devalued to 10% per day. It is the maximum devaluation in two decades. Its biggest reason is that Pakistan has to accept the provisions of the IMF. During all of this, the foreign exchange reserves of Pakistan have left only 3.09 billion dollars. This is the lowest level of reserves in 9 years. Afghan currency is being considered the best currency since the previous year. While the Pakistani currency is considered the worst and other weakest currency.
According to an official of the finance department of Afghanistan, dollar smuggling started when Afghanistan increases tax on exported coal to Pakistan. Officials told that the Aghani currency became the valued after Pakistani rupee was banned to use as a tender. And, this decision compels exporters to bring dollars back into the country.
A Businessman Report
Haji Muhammad Rasool is a coal businessman who buys coal from Afghanistan and exports it to Pakistan. He keeps some profit and sells in Pakistani currency. Afterward, he changes rupees into dollars and supplies to Afghanistan. He claims that finding dollars in Pakistan is very difficult. That’s why he uses grey markets near Peshawar where he pays 10% extra. He said that every businessman does the same because the Taliban government has banned bringing the Pakistani rupee into the country.
However, in spite of all these facts and news, if still dollars are being smuggled into Afghanistan, it is really terrible.