The ex-chairman of the Federal Board of Revenue (FBR), Shabbar Zaidi, hassuggested that with the effective handling of issues related to Afghantransit trade, the US dollar could potentially decrease to as low as 250.Zaidi emphasized that Afghan transit trade significantly influencesPakistan’s imports, accounting for nearly $6 billion.
He asserted that reducing this impact could lead to a stronger Pakistanirupee against the US dollar. He explained that Afghanistan lacks sufficientforeign exchange reserves and relies on dollars from Pakistan, oftenthrough the ‘hawala’ system, to finance its imports.
Additionally, Zaidi highlighted the interconnectedness of recent efforts tocombat currency smuggling and regulate Afghan transit trade. He commendedrecent government actions, including the notification of a new list ofitems prohibited for import by Afghanistan via Pakistani sea and borderports under the Pakistan-Afghanistan Transit Trade Agreement.
Furthermore, the FBR has imposed a 10 percent processing fee on significantcategories of Afghan transit commercial goods, such as confectioneries,chocolates, footwear, machinery, blankets, home textiles, and garments,imported into Afghanistan while in transit through Pakistan.
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Moreover, the FBR will require bank guarantees for all Afghan transit goodsequivalent to the total duties and taxes applicable to goods destined forAfghanistan through Pakistan. Zaidi emphasized that effective management ofAfghan transit trade could potentially resolve 20 percent of Pakistan’seconomic problems.