The ongoing crackdown against illegal forex trading and smuggling has had asignificant impact on the open market, resulting in a surplus of up to $900million, which has been deposited in banks, according to currency dealers.
These currency dealers have emphasized the importance of administrativemeasures that have yielded valuable results for the economy. Additionally,policy reforms related to Afghan transit and the smuggling of Iranian oilhave also contributed to the accumulation of hard-earned dollars.
Zafar Paracha, the General Secretary of the Exchange Companies Associationof Pakistan (ECAP), stated that an estimated $800 to $900 million has beendeposited in banks since the crackdown began in September. This achievementis seen as highly commendable. Furthermore, as a direct consequence of thecrackdown, the daily average trading volume of exchange companies hasincreased significantly, reaching $50 million compared to the earlier rangeof $5 to $7 million.
Mr. Paracha also highlighted that exchange companies are now selling up to$40 million per day to the banks, and there has been an unprecedentedincrease in inflows from overseas Pakistanis. Remittances channeled throughexchange companies have seen a 10 to 15 percent rise, with expectations ofa similar increase in inflows through banks.
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In the banking market, experts predict that remittances are anticipated torise by 25 percent to reach $2.5 billion in September compared to August.The State Bank of Pakistan (SBP) has been buying dollars from the interbankmarket for debt servicing, although official figures are not readilyavailable. As of September 28, the SBP held reserves totaling $7.6 billion.
Bankers have noted that the interbank market is experiencing higher inflowsdue to the daily depreciation of the dollar, prompting exporters to selltheir holdings. This situation has further contributed to the changingdynamics of the forex market.