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Arab News
2 days ago
- Business
- Arab News
At least five arrested as Pakistan widens crackdown on illegal currency exchange, transfers
ISLAMABAD: Pakistan's Federal Investigation Agency (FIA) has arrested five suspects involved in illegal currency exchange and transfer of money, the agency said on Sunday, amid a widening crackdown on black market currency traders. The development comes days after the Inter-Services Intelligence (ISI), Pakistan's powerful military-run spy agency, held a meeting in Islamabad with senior officials from currency exchange companies, amid growing concern over the rupee's depreciation, which fell to a 22-month low of Rs284.97 against the US dollar earlier this week. Maj. Gen. Faisal Naseer, a deputy chief of the ISI, chaired the session, according to Malik Bostan, who attended the discussion and is the chairman of the Exchange Companies Association of Pakistan (ECAP), told Arab News. The FIA had begun raiding informal, unregulated money transfer, or 'hundi' and 'hawala,' operators and currency smuggling networks. In a statement on Sunday, the agency said it was tightening the noose around networks involved currency smuggling and had conducted major operations in the southwestern Balochistan province that border Iran and Afghanistan. 'Five suspects involved in hawala, hundi and illegal currency exchange have been arrested,' the FIA said in a statement. 'The suspects were arrested in raids in different areas of Quetta and Chaman.' Pakistan operates a multi-tiered currency market, with rates diverging between the official interbank channel, the open market, and an unregulated 'grey market' where many traders and informal hawala dealers operate. Burdened by over $58 billion in imports in the last fiscal year, Pakistan faces severe inflationary pressure whenever the dollar strengthens. The rupee has lost 2 percent of its value since January, despite Pakistan's current account recording a surplus of $2.1 billion, according to central bank data. During the raids in Balochistan, the FIA said, officials seized 684,000 Pakistani rupees, 230.5 million Iranian rials, more than 135,000 Afghanis, 700 US dollars, 200 Saudi riyals and 150 Australian dollars. 'Cheque books, hawala-hundi receipts and bank deposit slips were also recovered from the suspects,' it said. 'The accused were involved in currency exchange without a license. They could not give a satisfactory answer to the authorities regarding the recovered currency.' The agency said it was further investigating the arrested suspects.
Business Recorder
5 days ago
- Business
- Business Recorder
Rupee gains against US dollar amid reported crackdown
Rupee's Performance Against US Dollar Since 04 March 2025 The Pakistani rupee strengthened against the US dollar, appreciating 0.19% in the inter-bank market on Thursday. At close, the currency settled at 284.22, a gain of Re0.54. On Wednesday, the currency settled at 284.76. Pakistan's law enforcement agencies have reportedly launched a crackdown against foreign currency smugglers, aiming to prevent the illegal outflow of currencies such as US dollars to neighbouring countries, including Afghanistan and Iran. The raids led to some appreciation of the rupee against US dollar on Wednesday, said Exchange Companies Association of Pakistan (ECAP) chairman Malik Muhammad Bostan on Wednesday. Internationally, the euro crept toward its highest level in nearly four years on Thursday while the yen held to gains following more progress on trade deals between the United States and its largest trading partners, which in turn lifted the broader market mood. Currencies mostly shrugged off news that US President Donald Trump, a vocal critic of Federal Reserve Chair Jerome Powell, will visit the central bank on Thursday. It was not immediately clear whether Trump, who has lambasted Powell repeatedly for not cutting US interest rates more aggressively, would be meeting with the Fed chief. Markets were paying close attention to various tariff negotiations. The European Union and the US are moving towards a trade agreement that could include a 15% US baseline tariff on EU goods and possible exemptions, two European diplomats said on Wednesday. That came on the heels of Washington's trade deal with Tokyo that lowers tariffs on auto imports and spares the latter from punishing new levies on other goods in exchange for a $550 billion package of US-bound investment and loans. Global markets took to the latest developments positively, as risk assets rallied and investors sold the US dollar. The dollar index eased slightly to 97.15. Oil prices, a key indicator of currency parity, rose on Thursday, buoyed by optimism over US trade negotiations that would ease pressure on the global economy and a sharper-than-expected decline in US crude inventories. Brent crude futures gained 24 cents, or 0.4%, to $68.75 a barrel by 0032 GMT. US West Texas Intermediate crude futures climbed 25 cents, or 0.4%, to $65.50 per barrel. Both benchmarks were little changed on Wednesday as markets monitored developments in US-European Union trade talks, following President Donald Trump's tariff deal with Japan.
Business Recorder
5 days ago
- Business
- Business Recorder
Intra-day update: rupee gains against US dollar amid reported crackdown
The Pakistani rupee saw significant improvement against the US dollar, appreciating 0.26% during the opening hours of trading in the inter-bank market on Thursday. At 10am, the currency was hovering at 284.03, a gain of Re0.73. On Wednesday, the currency settled at 284.76. Pakistan's law enforcement agencies have reportedly launched a crackdown against foreign currency smugglers, aiming to prevent the illegal outflow of currencies such as US dollars to neighbouring countries, including Afghanistan and Iran. The raids led to some appreciation of the rupee against US dollar on Wednesday, said Exchange Companies Association of Pakistan (ECAP) chairman Malik Muhammad Bostan on Wednesday. Internationally, the euro crept toward its highest level in nearly four years on Thursday while the yen held to gains following more progress on trade deals between the United States and its largest trading partners, which in turn lifted the broader market mood. Currencies mostly shrugged off news that US President Donald Trump, a vocal critic of Federal Reserve Chair Jerome Powell, will visit the central bank on Thursday. It was not immediately clear whether Trump, who has lambasted Powell repeatedly for not cutting US interest rates more aggressively, would be meeting with the Fed chief. Markets were paying close attention to various tariff negotiations. The European Union and the US are moving towards a trade agreement that could include a 15% US baseline tariff on EU goods and possible exemptions, two European diplomats said on Wednesday. That came on the heels of Washington's trade deal with Tokyo that lowers tariffs on auto imports and spares the latter from punishing new levies on other goods in exchange for a $550 billion package of US-bound investment and loans. Global markets took to the latest developments positively, as risk assets rallied and investors sold the US dollar. The dollar index eased slightly to 97.15. Oil prices, a key indicator of currency parity, rose on Thursday, buoyed by optimism over US trade negotiations that would ease pressure on the global economy and a sharper-than-expected decline in US crude inventories. Brent crude futures gained 24 cents, or 0.4%, to $68.75 a barrel by 0032 GMT. US West Texas Intermediate crude futures climbed 25 cents, or 0.4%, to $65.50 per barrel. Both benchmarks were little changed on Wednesday as markets monitored developments in US-European Union trade talks, following President Donald Trump's tariff deal with Japan. This is an intra-day update
Business Recorder
6 days ago
- Business
- Business Recorder
Currency smugglers: LEAs decide to intensify crackdown
KARACHI: Law enforcement agencies have decided to intensify their crackdown on currency smugglers and unauthorized money dealers, accordingly, on Wednesday, FIA teams conducted intelligence-based raids, contributing to a decline in the dollar rate in the open market. According to the Exchange Companies Association of Pakistan (ECAP), the action followed a meeting between ECAP Chairman Malik Muhammad Bostan and members with Director General (C) ISI, Major General Faisal Naseer, at his office in Islamabad on Tuesday. According a statement issued by the ECAP, during the meeting, Major General Faisal Naseer inquired about the reason of recent sharp increase in the exchange rate. In response, Malik Bostan explained that the surge is due to smuggling of dollars and other foreign currencies to Iran and Afghanistan. Additionally, he highlighted that agents of these smugglers trap customers outside legal exchange companies by offering better rates and then they take these customers to secret offices to buy foreign currencies at black market rates. This move of smugglers is preventing customers from reaching legal exchange counters and, due to higher rates in the black market the supply of dollars is decreasing daily. Bostan further mentioned that due to new FBR regulations, any purchase above Rs. 200,000 made in cash (rather than through banking channels) results in the imposition of tax on the seller. Consequently, many non-filer customers, to hide their identities, are buying and hoarding foreign currencies from the black market at large scale. He suggested that the government should not impose any tax on purchase of $2,000 in foreign currency. This would reduce the demand for dollars and help bring down the exchange rate quickly, he added. According to Malik Bostan, Major General Faisal Naseer responded positively and said he would discuss this proposal with the government. Moreover, he immediately ordered law enforcement agencies to launch a crackdown on currency smugglers and arrest them. As a result of this action, the smuggling mafia reportedly went underground by Wednesday. Bostan further said that on Wednesday FIA teams conducted intelligence-based raids, which led to a drop in the market dollar rate from Rs. 288.60 to Rs. 288, and in the interbank market, the rate dropped from Rs. 285 to Rs. 284.80 per dollar. Copyright Business Recorder, 2025
Business Recorder
6 days ago
- Business
- Business Recorder
Pakistan rupee gains amid reported crackdown against US dollar smugglers
KARACHI: Pakistan's law enforcement agencies have reportedly launched a crackdown against foreign currency smugglers, aiming to prevent the illegal outflow of the currencies such as US dollars to neighbouring countries, including Afghanistan and Iran. The raids led to some appreciation of the rupee against US dollar on Wednesday, according to Exchange Companies Association of Pakistan (ECAP) chairman Malik Muhammad Bostan. In a press statement, Bostan said the action helped the domestic currency recovering by Re0.60 to Rs288 a US dollar during intra-day trading in the open market on Wednesday. Pakistan's real effective exchange rate hits 21-month low in June 2025 'FIA [Federal Investigation Agency] teams, acting on secret intelligence, conducted large-scale raids today [Wednesday] against currency smugglers, due to which the dollar rate dropped in the open market and in the interbank market as well,' Bostan said. In the inter-bank market, the domestic currency recovered by Rs0.21 – a higher gain in a day compared to recent weeks and months – and closed at Rs284.76/$ on Wednesday compared to Tuesday's close at Rs284.97/$, according to the State Bank of Pakistan (SBP). This was relatively a bigger recovery in a day compared to usual fluctuation seen in the recent weeks, it was learnt. Bostan said he had led a currency dealers' delegation to Director General of Counter‑Intelligence (DGC) General Faisal Naseer at the Inter-Services Intelligence of Pakistan (ISI) in Islamabad on Tuesday. Sunridge raises Rs2bn via Pakistan's first agri-infrastructure sukuk When asked about the dollar rate rising in Pakistan, Bostan attributed the reason to currency smuggling to Iran and Afghanistan, according to ECAP statement. 'Due to higher black market rates, the supply of dollars is decreasing to legal currency dealers day-by-day,' he had said. 'On this, General Faisal Naseer immediately ordered law enforcement agencies to crack down on currency smugglers and arrest them. As a result of this action, the currency smuggler mafia has gone underground today [Wednesday].' 'If the FIA continues this crackdown against currency smugglers and hundi-hawala operators, in the coming days, the dollar rate could fall further — from Rs280/$ to Rs270/$ and even to Rs250/$,' Bostan was quoted as saying in the ECAP statement.
