Pakistan's military helps stifle currency black market to stabilize rupee – Arab News
KARACHI/ PESHAWAR: When the military was called on to help defend Pakistan’s ailing currency, licensed foreign exchange traders cheered while their black market rivals in the bazaars of Peshawar, Karachi and other cities shuttered their shops before they got taken away.
The campaign against the informal market has worked. Tens of millions of dollars have poured back into Pakistan’s interbank and open markets, dealers say, since raids on black market operators began on Sept. 6.
The Pakistan rupee, which plumbed record lows on Sept. 5, recovered to below 300 per US dollar on the open market earlier this week, rallying more than 10 percent from levels prevailing before the clamp down to stand even stronger than the official rate. While there have been other attempts to curb the black market when the rupee has been under stress, the latest push came after licensed dealers requested army chief General Asim Munir take action, rather than leave it solely to the civilian caretaker government that was put in place last month to run Pakistan till elections, currently expected to be held early next year.
Called to Islamabad to discuss how to fix the dysfunctional state of the currency market, Malik Bostan, chairman of the Exchange Companies Association of Pakistan (ECAP), spelt out the problem — hardly anyone was selling or remitting dollars through regular channels.
“We were not getting customers. Ninety percent were going to black market dealers, cutting our supply of foreign exchange,” Bostan explained.
At a meeting last week with officials, including heads of law enforcement and security agencies, Bostan and colleagues said the matter needed to be urgently escalated to General Munir.
“The army chief took notice, and the restoration of supply in the open market is credited to him,” Bostan told Reuters.
“A task force was made that is now cracking down on the illegal market.”
Representatives of the Federal Investigation Agency (FIA), which focuses on fighting organized crime, and the military’s Inter-Services Intelligence (ISI) spy agency were present at the meeting in Islamabad, said Bostan, declining to say who else was there or who had called the meeting.
Two currency dealers, one in Karachi, the other in Lahore, also said security officials, including officers who identified themselves as being from the ISI, had summoned them to learn what was needed.
Spokesmen for the military and civilian government did not respond to requests for comment. But a security official, who requested anonymity, hailed the success of the crackdown.
“The reason is the initiation and enforcement of administrative measures against hoarders, black marketeers and smugglers of dollars,” the official said. “The government has issued strict orders against unauthorized money changers and other mafias.”
For the past week, the hundreds of currency shops in the usually bustling lanes of Peshawar’s Chowk Yadgar bazaar have been closed.
“A few days ago, some people, believed to be law enforcement officials, came here and arrested senior members of this market and put them in their vehicles with tinted glasses and drove them away to an unknown location,” said Hajji Luqman Khan, an aged trader, told Reuters.
Locals referred to the plain clothes officials who carried out the raids as “farishtay”, meaning “angels,” a word used to describe ISI agents, but no-one was flashing badges, so who they actually were remains unconfirmed.
The raid was one of many across the country.
A security official, speaking on the condition of anonymity, confirmed the military’s role in the crackdown, but said it was working alongside other bodies.
Controlling the open market rate is critical for Pakistan following the $3 billion bailout from the International Monetary Fund (IMF) that was agreed in July to help avert a sovereign default.
An IMF demand that the difference between the interbank and open market does not exceed 1.25 percent will be a key part of discussions set to begin later this month, before the release of the next tranche of the bailout.
Giving an indication of the scale of the problem posed by the parallel markets, Sheikh Allauddin, the president ECAP, reckoned annual transactions in the black market were roughly $5 billion, compared to $7 billion in the regulated open market.
The biggest crackdowns over the past week have been in the northwestern city of Peshawar and southwestern city of Quetta, both hubs for trade with neighboring Afghanistan.
With banking channels frozen in the aftermath of the Taliban takeover in 2021, massive amounts of dollars are smuggled into Afghanistan from these two cities.
While a crackdown on the black market was needed to stabilize the rupee, it “is a temporary fix,” said Fahad Rauf, Head of Research at Ismail Iqbal Securities.
High inflation and chronic external deficits lie at the heart of the currency’s problem and closing off people’s access to black market dollars risks storing up pent-up demand.
“There is an unprecedented demand for the dollar,” Hanifullah Mohmand, a trader in the Peshawar market, said. “Common people are buying dollars, fearing that Pakistan is going to default soon.”
ISLAMABAD: Pakistan’s former prime minister Imran Khan filed a bail application in the Islamabad High Court (IHC) on Saturday in a case registered under the Official Secrets Act of 1923 in which he has been accused of divulging the contents of a confidential diplomatic cable for political purposes.
The development follows the decision of a special court conducting his prison trial in the matter which turned down his bail petition on Thursday. Khan has been in District Jail, Attock, since he was arrested from his residence in Lahore in corruption case last month.
The former prime minister mentioned the diplomatic dispatch from a country’s former envoy to Washington for the first time at a rally in Islamabad right before his ouster in a no-confidence vote in April of last year, telling his party supporters it proved a US conspiracy to topple his administration.
While the US denied being involved in any such conspiracy, Pakistani authorities accused Khan of compromising the state’s secret communication system with its diplomatic missions abroad and set up the special court to hold his trial.
According to Dawn newspaper, the ex-premier petition has asked the court to grant him post-arrest bail until the final disposal of the case.
“Never before, history has witnessed the ‘arrest’ and ‘prosecution’ of a former prime minister and a former foreign minister under this law,” the newspaper shared the content of the bail application that also made a reference to Khan’s close aide and former foreign minister Shah Mahmood Qureshi who is also facing allegation in the cipher case.
“The petitioner’s primary concern was to prevent foreign interference in domestic political affairs,” it added.
The bail application described Khan as “one of the few honest and dignified statesmen” of the country, saying the sole objective of the case was “political victimisation and score-settling.”
The document also maintained the ex-PM had become a threat for the “well-established political forces” of Pakistan during to his growing popularity with the masses.
While the special court had extended Khan’s judicial remand until September 26 during its last hearing, the IHC accepted his petition which will be heard by Chief Justice Amir Farooq on Monday.
ISLAMABAD: Caretaker Prime Minister Anwaar-ul-Haq Kakar described Pakistan’s border situation as “alarming” in an interview on Saturday, though he ruled out the possibility of any delay in the next general elections due to the security situation on the country’s international frontiers.
Kakar made this assertion against the backdrop of rising political voices seeking the election commission to announce the date for the national polls, which have already been delayed due to the delimitation of national and provincial constituencies in the country.
President Arif Alvi had dissolved the National Assembly on the advice of former Prime Minister Shehbaz Sharif in August, just a few days before its tenure was set to expire.
According to the constitution, the next election should have been held within 90 days, ending at the beginning of November. However, the Election Commission of Pakistan (ECP) decided to redraw the constituencies based on a digital census conducted earlier this year in April. There is growing uncertainty surrounding the national polls since then which may now happen somewhere in February.
The prime minister told the Voice of America’s Urdu service there was no fear of delayed elections due to security situation on Pakistan’s borders.
“At the moment, I do not see any such possibility,” he told the interviewer. “It is true that there is an alarming situation on the eastern and western borders which has enhanced the security threat and our response mechanism. But we are confident that we will control the situation and complete the electoral process at the same time.”
Kakar disagreed when asked why his administration was doing almost everything other than focusing on the national polls.
“It is not right to say that we are not taking steps to facilitate elections,” he continued. “The caretaker administration has been fulfilling the Election Commission of Pakistan’s requirements and fully providing it assistance on a daily basis.”
However, he reiterated it was not the mandate of his interim government to announce the elections and was only required to provide financial, security and other assistance to the ECP.
He also maintained his government would not raise any objection if the Supreme Court ruled in favor of holding the general elections within the 90-day period.
ISLAMABAD: Pakistan’s cricket body said on Saturday its team of medical experts was examining a shoulder injury sustained by pacer Naseem Shah during a recent Asia Cup match, as a media report claimed he might miss the upcoming World Cup in India.
Shah was bruised and left the ground during Pakistan’s second 50-over match against India that was played in Colombo last week.
Apart from losing the fast bowler in the field, the green shirts also suffered a massive defeat by 228 runs at the hands of their traditional cricket rivals.
“The Pakistan Cricket Board’s medical team has been monitoring the status of Naseem Shah’s shoulder injury sustained during the Asia Cup 2023,” the PCB said in its official statement. “Medical consultations with the experts are underway to provide the best possible care to him.”
“The PCB medical panel will decide on the fast bowler’s return to cricket based on further assessments,” it added.
According to a report that appeared on ESPN Cricinfo, the Pakistani quick could miss the ODI World Cup since the scans had revealed the injury to his right shoulder was much worse than initially suspected.
“The PCB is understood to be seeking a second opinion, but scans from tests in Dubai appear to show the injury could rule him out for the rest of year,” it said. “Should secondary results back up the initial ones, Naseem could be looking at a long layoff. His participation in the Test series in Australia at the turn of the year is in doubt, and he could also miss the next Pakistan Super League in 2024.”
Pakistan skipper Babar Azam said a day earlier Shah was central to his team’s World Cup plans.
“Naseem Shah has missed a couple of [Asia Cup] matches [and] I don’t know about his recovery,” he said. “But in my opinion he will be in the World Cup.”
If Shah is ruled out from the upcoming tournament in India, it would be a major setback to Pakistan.
ISLAMABAD: Pakistan’s national air carrier said on Saturday its flight operations were beginning to return to normal just a few days after its management confirmed its decision to ground much of its fleet amid a major financial crisis.
The state-owned enterprise is said to be on the verge of default, as the government refused to provide Rs 23 billion ($76 million) in support of operational expenses, as requested by airline officials.
Authorities had previously allocated substantial funds to assist Pakistan International Airlines (PIA). However, it continued to rack up billions of rupees in arrears and losses over the years.
The caretaker administration of Prime Minister Anwaar-ul-Haq Kakar convened a meeting this month to review PIA’s situation and instructed relevant officials to prepare a restructuring plan to improve the financial situation of the cash-strapped airline.
“PIA flight operations have started to return to normal,” its management announced in a brief statement. “Seventy-two flights will depart from airports across the country [on Saturday]. Eighteen domestic flights have already departed while 54 overseas flights will be flying out soon.”
PIA also issued a statement a day earlier, denying the rumors of its closure due to the ongoing financial situation. Prior to that, media reports suggested the airline’s management was beginning to scale down its flight operations.
The national air carrier confirmed earlier this week it had grounded 14 out of its 31 aircraft due to the financial crisis.
But the Economic Coordination Committee (ECC) of Pakistan turned down its request for a massive bailout package of Rs 23 billion last week without getting a viable plan to deal with its financial crisis.
The ECC asked the Finance Division and the State Bank of Pakistan to assist PIA management, but only after the restructuring plan was finalized and approved.
ISLAMABAD: Pakistan’s Federal Investigation Agency (FIA) and the Hellenic Police of Greece have agreed to cooperate against human trafficking and migrant smuggling by formalizing a memorandum of understanding (MoU), Pakistan state media reported on Saturday, months after a deadly shipwreck killed Pakistanis among hundreds off Greece. 
On June 14, a weathered trawler foundered in the vicinity of Greece’s Peloponnese peninsula, with approximately 750 individuals from Pakistan, Egypt and Syria aboard who were bound for Italy from Libya. Only 104 of them were rescued.   
Officials said more than 350 Pakistanis were among the passengers who were escaping challenging economic circumstances at home for a brighter future in Europe.   
The agreement between Pakistan’s FIA and the Greek police would allow for the exchange of critical information on human smugglers, the state-run Radio Pakistan reported. 
“This strategic collaboration will enable the exchange of critical information, bolster mutual support in criminal investigations, and promote capacity-building endeavours between the two agencies,” the report read. 
“This significant accord shows the dedication of both agencies to combat transnational crimes.” 
Following the June 14 incident, Pakistani officials had vowed to take decisive measures against human smugglers, prompting the FIA to initiate a campaign against the illicit operators.  
Last week, the FIA also announced the arrest of a “most wanted” suspect in the Greek migrant shipwreck.  
“The most wanted human trafficker involved in the Greek boat accident has been arrested by the FIA’s Gujrat circle,” the anti-crime agency said in a statement.  
The individual in question, Javed Hussain, had been sought by the FIA in seven different cases. 


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