Pakistan’s forex crackdown yields $900 million surplus: ECAP chief

KARACHI: Pakistan’s ongoing crackdown on illegal forex trading and smuggling has resulted in a surplus of up to $900 million in the open market, currency dealers reported on Monday.

This surplus has been deposited in banks, marking a significant boost for the country’s economy.

Currency dealers emphasised that the implemented administrative measures have yielded highly valuable results. Additionally, policy reforms targeting Afghan transit and the smuggling of Iranian oil have further contributed to the accumulation of hard-earned dollars.

Exchange Companies Association of Pakistan (ECAP) General Secretary Zafar Paracha said, “We have deposited an estimated $800 to $900 million in the banks since the crackdown started in September, showing highly appreciable results.”

As a direct outcome of the crackdown, the daily average trading volume of exchange companies has expanded from $5-$7 million to $50 million.

Paracha added, “We are selling up to $40 million per day to the banks, while inflows from overseas Pakistanis are also unprecedented.”

“The remittances being channeled through the exchange companies have increased by 10 to 15 percent, and surely inflows through banks would also rise,” he noted.

Bankers in the market anticipate a 25 percent increase in remittances to $2.5 billion in September compared to August.

While the State Bank of Pakistan (SBP) has been buying dollars from the interbank market for debt servicing, no official figure was available at the time of reporting. As of September 28, SBP held reserves totaling $7.6 billion.

Bankers pointed out that the interbank market is experiencing higher inflows due to the day-to-day depreciation of the dollar, which has compelled exporters to sell their holdings.