Flight of US dollars from Pakistan to Afghanistan continues unabated
Dec 27, 2022
Karachi [Pakistan], December 27 : The flight of US dollars from Pakistan to Afghanistan continues unabated resulting in the erosion of Islamabad's foreign exchange reserves, reported Dawn.
On Monday, the Exchange Companies Association of Pakistan (ECAP) said that Pakistan has been facing a large-scale outflow of US dollars to Afghanistan since the Taliban's takeover of Kabul last year.
Addressing a presser, ECAP Chairman Malik Bostan said the USD flight to Kabul has eroded Pakistan's foreign exchange reserves.
The exchange rate has been destroyed by smuggling and fake imports of dollars as well as Islamabad's negligence towards the issue, he alleged, reported Dawn.
Bostan pointed out that when the Taliban took over Kabul, one greenback was available for Rs 155 and Pakistan's reserves stood at USD 22 billion. Now the reserves have sunk to their lowest level in about eight years with a dollar selling for Rs 225 in the inter-bank market.
This unhindered flow of the American currency towards Afghanistan has created a crisis for Pakistan, reported Dawn.
Bostan said legally, 15 million dollars are used to cross each day from Pakistan to Afghanistan since Islamabad has permitted each person to take USD 1,000 per day while 15,000 people regularly travel to the neighbouring country each day.
He said that two months ago, the Kabul regime stated that all Pakistani currency should be converted into dollars or other foreign currencies.
Keeping more than 0.5 million Pakistani rupees is prohibited in Kabul and any person found with such an amount of PKR would be tried under the anti-money laundering laws.
"For 42 years Afghans have been trading in PKR. They have hundreds of billions of PKR. But now they are buying dollars from Pakistan at any cost. They will siphon off the entire dollars from Pakistani markets," Bostan warned, adding that Pakistan must take up the matter with the Kabul government, reported Dawn.
He said commercial banks are buying USD 120 million-USD 130 million per month from exchange companies for credit cards. These cards are legally transferring dollars from the country.
However, the government slashed the annual per card spending limit to USD 30,000. Earlier, there was no limit on such transactions, reported Dawn.
"Kabul government has successfully maintained the dollar rate at 88 Afghani and this was due to their policies as they don't print notes unless and until they get dollars," he said.
