The Pakistani rupee appreciated by Rs 4 against the US dollar on Wednesday as the cash-strapped country’s authorities launched a crackdown against illegal smuggling of the greenback amidst a squeeze in the national currency.
After gaining its value by Rs 4, the rupee was selling at Rs 313 during the day while it was being bought for 310 in the open market, according to the Forex Association of Pakistan. However, the local currency gained 12 paise against the dollar in the interbank market to come to 306.98 from yesterday’s (Tuesday’s) close of 307.10. Malik Bostan, the Chairman of the Exchange Companies Association of Pakistan, said the change in the value of dollars followed authorities’ strict actions in controlling the “black market”.He hoped that the interbank and open market rates would soon return to normal.The change came as the government started cracking the whip against smuggling and hoarding of US dollars.
The action will also be directed against the enablers, government officials facilitating the smuggling and those patrons who have been identified, the Express Tribune newspaper reported.The report quoted sources as saying that lists had been made and a prolonged crackdown would be initiated. Sources further added that with major policy reforms underway, the commodity and currency businesses will be “transformed”. To implement the new measures effectively, the government will also install and upgrade monitoring systems at land, sea and airports to curtail illegal movement of goods and currency.
Earlier, caretaker Prime Minister Anwaarul Haq Kakar directed the customs authorities to establish a monitoring system at irregular border crossings to prevent smuggling in the country. Decision to crack down on the dealers was made the day the rupee-dollar parity in inter-bank trading crossed Rs 300, a threshold breached for the first time in Pakistan’s history on the back of high dollar demand because of imports, dollarisation of the economy, smuggling and financing of Afghanistan’s imports.
Pakistan’s law enforcement agencies have failed to stop the smuggling of dollars to Afghanistan, which has been going on by using the crates of oranges and in connivance with the law enforcement agencies.State institutions seem to have failed to guard borders and international airports that have turned into dens of smuggling. The central bank had also lowered the ceiling for the outbound flow of the greenback to USD 5,000 per person, which created problems for the people but did not help to curb the outflow.Sources said that a major factor behind the high demand for dollars was the financing of smuggled goods from Iran, mainly diesel and edible oil, and payments for Afghan transit trade. They pointed out that diesel smuggling from Iran deep into Pakistan was not possible without the involvement of agencies that were responsible to curb smuggling and ensure border security. The smuggled diesel price is paid in US dollars to Iran, according to Pakistan Customs officials.
Similarly, Afghan transit trade was also financed by buying dollars from Pakistan’s market but its exact quantum was unknown, said the customs officials. Separately, the government also announced to initiate action against those involved in the theft of electricity as people were protesting against inflated bills.Power Minister Muhammad Ali and Information Minister Murtaza Solangi addressing a press conference said that a “full force” crackdown has been planned against electricity theft.
“The background is that in our country, some domestic consumers steal electricity and others don’t pay bills,” the power minister said, adding that common people pay for the stolen electricity.
