In response to the ongoing challenge of reversing the depreciation of the Pakistani rupee on a sustainable basis, Pakistani authorities are gearing up to conduct raids on the residences of individuals suspected of hoarding US dollars.
Sources from the security sector have revealed that these raids will be carried out by sensitive agencies in collaboration with the Federal Investigation Agency (FIA), the entity responsible for handling financial crimes within the country. This crackdown marks the next phase in an ongoing effort to curb the practice of hoarding US dollars, which has been a significant contributor to the depreciation of the Pakistani rupee.
The rising exchange rate in Pakistan is primarily a consequence of an artificial shortage deliberately created by these currency hoarders. Since 2018, these individuals have been reaping substantial profits by purchasing US dollars at lower rates and later selling them at higher prices.
Another contributing factor to this issue has been the smuggling of US dollars into Afghanistan, a war-torn nation where the exchange rate is paradoxically much lower despite the absence of significant economic or industrial activities.
However, the crackdown on currency dealers across Pakistan, particularly in Khyber Pakhtunkhwa and Balochistan, along with stringent monitoring along the western borders, has yielded improvements in the situation.
According to insider information, a list of suspected hoarding locations, often private residences, has been compiled with the assistance of records from money exchange companies. These records have also revealed the identities of individuals purchasing substantial quantities of US dollars.
This decision to conduct raids comes in response to credible intelligence regarding the use of private residences by the underground network engaged in hoarding US dollars, which was uncovered during the recently initiated crackdown.
The effects of these measures are already becoming apparent. The Pakistani rupee has been on an upward trajectory following the government’s crackdown on the illegal movement of US dollars in both licensed and black markets.
In recent trading, the interbank exchange rate experienced a drop of Rs1.15, with the US dollar now trading at Rs294.80 compared to the previous day’s closing rate of Rs295.95. This represents a depreciation of the US dollar by Rs12.30 since it reached a historic high of Rs307.10 in terms of the official exchange rate.
Similarly, the exchange rate in the open market recorded at Rs297.50, reflecting a gain of Rs1.50 for the Pakistani rupee against the US dollar, which had traded at over Rs330 not too long ago. In the black market, the rate was even higher, exceeding Rs340.
