ISLAMABAD: Pakistan has launched an operation against dollar hoarding and currency speculation trade, information minister Fawad Chaudhry said on Friday, in a bid to stabilize the exchange rate which has lost about 25 percent of its value over the past year.
The announcement came just hours after finance minister Asad Umar ruled out a further devaluation of the rupee, urging people to invest in the stock market and not waste money buying dollars.
“Government has directed FIA [Federal Investigation Agency] to launch a full fledged operation against Dollar hoarding, and speculative currency trade,” the information minister said in a Twitter post. “The operation is being launched in coordination with State Bank and Ministry of Finance.”
The FIA is empowered under the Foreign Exchange Regulation Act to initiate action against illegal money changers and export of the dollars through illegal means.
“We have to wait for the government’s instruction for the crackdown against dollar hoarding,” Abid Qamar, a spokesman for the State Bank of Pakistan, told Arab News, declining further comment.
Pakistan’s consumer price inflation rose in March to its highest since November 2013, adding to economic headwinds besetting Prime Minister Imran Khan’s government.
Inflation rose to 9.41 percent year-on-year, up from 8.21 percent in February, lifted by sharp rises in food, fuel and transport costs that have squeezed household budgets.
Last month, the central bank lifted its key policy rate by 50 basis points to 10.75 percent, citing continuing inflationary pressures as well as high fiscal and current account deficits.
Consumer price inflation has also jumped sharply over the past year, climbing from under 4 percent at the start of 2018.
Energy costs in particular have risen sharply, hit by a series of devaluations of the rupee, and the government on Sunday announced a 6 rupee rise in petrol prices to 98.88 rupees a liter.
Traditionally, Pakistan has kept its exchange rate over-valued, incurring losses to the economy, the finance minister said. The rupee should be aligned with its fundamentals and its benchmark should be the real effective exchange rate (REER), finance minister Umar said on Friday.
He added that there were no demands for what the exchange rate should be in the talks with the IMF.
Zafar Paracha, general-secretary of the Exchange Companies Association of Pakistan, said the crackdown against dollar hoarding would not help bring down the exchange rate unless the government controlled it in the interbank market.
“The government should first amend the foreign exchange regulation act to set a certain limit on the amount of foreign currency or rupees that one can keep at home,” he told Arab News.
He said the FIA crackdown against illegal money changers, “who have been enticing people to buy dollars” may be effective for some time but that is not a permanent solution to deal with it.
The Forex Association of Pakistan on Friday urged all exchange companies in the country to sell the US dollar to only “authentic customers who need the dollar genuinely” including people going abroad for medical treatment, education and pilgrimage.
“If people stop buying the dollar for a few days, its exchange rate will come down automatically,” Malik Bostan, president Forex Association of Pakistan, told Arab News.
“The dollar is currently appreciating due to the gap in supply and demand … the supply of the dollar at the moment is four to five million dollars daily against the demand of seven to eight million dollars,” he said, “The government should focus on addressing this gap instead of creating further panic in the market through crackdown.”
Pakistan launches operation against dollar hoarding to stabilize exchange rate
Pakistan launches operation against dollar hoarding to stabilize exchange rate
- Operation aimed at stabilizing the exchange rate which has lost about 25 percent of its value over the past year
- State bank and finance ministry will jointly coordinate the crackdown
In Karachi, a café where Ramadan means feeding anyone who arrives hungry
- Karachi’s Cafe Mehmood has offered free meals to the needy for nearly four decades
- Restaurant owners say paying customers and charity diners receive the same quality food
KARACHI: As the call to Maghrib prayer echoes through Karachi’s Sindhi Muslim Housing Society, long rows of people seated along a busy roadside begin to break their fast. Plates of fruit, samosas and glasses of the rose-flavored drink Rooh Afza move down the line as men, women and children share the evening meal after a long day of fasting in the city’s humid heat.
The gathering is a familiar Ramadan scene outside Cafe Mehmood, a modest restaurant in Pakistan’s largest city that has quietly sustained one of Karachi’s longest-running traditions of feeding the hungry.
Operating since the 1980s, the eatery is well known not only for its food but for a daily dastarkhwan, a communal meal spread laid out for anyone who arrives hungry. Donations collected from visitors and well-wishers help fund the initiative, allowing the restaurant to provide meals throughout the year to people who cannot afford to pay.
The tradition reflects a wider culture of charitable food distribution in Pakistan, particularly during Ramadan, when mosques, community groups and businesses organize iftar meals for fasting Muslims. In Karachi, a sprawling city of more than 20 million people, such initiatives often fill gaps in a fragile social safety net.
“Around 12,000 people come to this dastarkhwan daily and derive benefit from it,” said Imran Khan, the eldest son of one of the restaurant’s founders.
Pakistan, a country of more than 240 million people, has struggled with rising living costs in recent years following economic turmoil marked by inflation, currency depreciation and higher energy prices. For many families dependent on daily wages or informal employment, free community meals can provide an essential lifeline.
Cafe Mehmood’s story began in 1985, when three brothers opened the restaurant and named it after one of them, Mehmood. The charitable meals started modestly when the founders began serving food to a handful of people sitting on the footpath outside the restaurant.
Over time, word spread and more people began arriving. Donations from visitors and well-wishers helped expand the effort into a large-scale operation feeding thousands each day.
Communal meal spreads are common across Karachi, particularly during Ramadan, but the scale and schedule of the dastarkhwan outside Cafe Mehmood sets it apart.
“There are no specific [meal] timings,” Khan said. “It starts at seven in the morning and runs until 12 at midnight. During that period if anyone comes empty stomach, they are fed well.”
During Ramadan, however, the restaurant focuses its efforts on iftar and the meals that continue until the pre-dawn suhoor.
The service runs throughout the year, pausing only on three days annually: Eid Al-Fitr and the first two days of Eid Al-Adha.
According to Khan, the restaurant prepares iftar for around 2,000 to 2,500 people each day, followed by dinner for roughly the same number.
To manage the demand, Cafe Mehmood operates a separate kitchen dedicated to preparing food for the charity meals. Inside the restaurant, customers who pay for their meals sit at tables, while outside, those who cannot afford to pay are served at long communal spreads laid out on the street.
Yet the owners say the difference is only in where the food is served, not in its quality.
“We make sure there is no compromise on quality while the taste, hygiene and service is similar to what we offer to our customers,” said Ismail Saeed, one of the founders’ grandsons who joined the family business five years ago.
Today, the restaurant and its charitable kitchen are run by the next generation: six members of the founding families and their nine sons.
Saeed said he had long wanted to take part in continuing the tradition.
“It has been a part of our genes since the beginning to help the needy, not just in terms of food but otherwise as well,” he said.
“We were provided with a platform through which we could do it, so I was always very keen about it.”
The charity meals are sustained through a combination of restaurant contributions and public donations. Visitors frequently stop by to give cash, while others transfer money online after learning about the initiative.
For those who cannot attend the communal meal spreads in person, the restaurant also distributes food parcels, particularly to women and people registered as deserving beneficiaries.
A typical meal served through the charity program includes chicken or beef gravy with two flatbreads, costing around Rs110 (about $0.39) per serving.
Despite its popularity, Cafe Mehmood historically avoided promoting its charitable work. For the family that runs the joint, the goal has remained simple: that no one who comes to their door leaves hungry.
“It was also the need of the hour,” Saeed said.
