Stringent measures against illegal currency trading and smuggling have yielded a remarkable $900 million surplus in the open market, which has been subsequently deposited in banks. Zafar Paracha, the General Secretary of the Exchange Companies Association of Pakistan (ECAP), reported that approximately $800-900 million found its way into banks following the crackdown that began in September 2023.
This crackdown has significantly boosted the daily average trading volume of exchange companies, increasing it from a range of $5-$7 million to a substantial $50 million. Paracha noted that dealers are now selling up to $40 million per day to banks, and remittances from overseas Pakistanis are contributing significantly to these flows.
In addition to these gains, economic benefits have emerged from much-needed measures, coupled with ongoing reforms concerning Afghan transit and the smuggling of Iranian oil, which have aided in preserving hard-earned money.
Remittances funneled through exchange companies have seen a notable increase of up to 15 percent, with expectations of a rise in inflows through banks. Remarkably, remittances are projected to surge by 25 percent to reach $2.5 billion in September. Although the State Bank of Pakistan (SBP) was reportedly buying dollars from the interbank market for debt payments, specific figures on this operation remain inconclusive.
Recent trends and conversations among bankers suggest that the interbank market is witnessing a boost in inflows due to the daily depreciation of the dollar, prompting exporters to convert their holdings into liquid assets for a profitable return.
