KARACHI: Pakistan’s crackdown on black market dollar trading has strengthened the rupee, but traders say under-the-counter deals have swiftly shifted to smartphones and home deliveries instead.
Many unlicensed exchange shops have been shut since July 22, when the military spy agency summoned representatives of the sector to explain the US dollar’s rising cost in the open market. Soon after, raids were carried out by the Federal Investigation Agency, which tackles financial crime and smuggling.
Since the crackdown began, the rupee has rebounded from a sharp fall against the dollar earlier in July. In the open market, it firmed from 288.6 per dollar on July 19 to about 286 in recent sessions.
But traders and bankers say the trade continues, suggesting the crackdown’s effects could be short-lived.
The black market operates outside official channels and includes unlicensed dealers, personal networks, and digital peer-to-peer exchanges, with customers seeking to skip tax declarations, avoid burdensome paperwork and bypass limits on official currency purchases.
In Peshawar, a city near the Afghan border long known for black market currency deals, many shops in the historic Chowk Yadgar district remain shuttered, though some traders were still operating discreetly in back-alley booths.
“The trade didn’t stop. It just moved,” said Ahmad, a dealer whose family has been in the business for generations. “Now it’s on WhatsApp. If you know someone, the dollars come to your house.”
“The big players have shifted to safer locations and kept going,” said another trader, Gul. Both traders asked not to give their full names.
Even retail buyers are bypassing the formal foreign exchange market. Hassan, a manager at a multinational firm in Karachi, said stricter documentation drove him to an informal forex chat.
“Everyone there is a buyer or seller. No middleman, no commission. Sometimes it’s physical cash, sometimes bank transfers, sometimes crypto,” he said.
STRICTER FX DISCIPLINE
On Monday, Pakistan’s central bank called in bank treasury heads to address pressure on the rupee. Two bankers said they were told to stop buying dollars from exchange companies at above-official rates on the grounds it was skewing the market.
Banks were asked to rely on their own inflows from exports and remittances, but both sources have slowed. Exporters are delaying bringing money home, betting the rupee will weaken. Remittances are also tapering off as banks reduce incentives once offered to attract overseas inflows.
Authorities also pressed banks to keep the gap between the interbank rate and the open market rate narrow, a condition of Pakistan’s $7 billion IMF deal meant to discourage speculation.
“These meetings have been happening for years, but this one was more pointed,” one banker said, speaking on condition of anonymity.
The central bank is expected to cut rates on Wednesday, easing inflation but risking pressure on the rupee.
Pakistan’s crackdown on black market dollar trade pushes deals online
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Pakistan’s crackdown on black market dollar trade pushes deals online
- Pakistan’s crackdown on black market dollar trading has strengthened the rupee, but traders say under-the-counter deals have swiftly shifted to smartphones and home deliveries instead
Police in London arrest pro-Palestinian protesters
LONDON: Police in London arrested two people who called for “intifada” during a pro-Palestinian protest, which followed a decision by authorities to toughen enforcement of hate speech laws after a deadly attack in Australia.
The arrests came hours after police in London and Manchester, England, announced a crackdown on protesters using slogans such as “globalize the intifada.”
While pro-Palestinian demonstrators say the slogan describes the worldwide protests against the war in Gaza, Jewish leaders say it inflames tensions and encourages attacks on Jews, including the attack that killed 15 people on Sunday at Bondi Beach in Sydney.
London Metropolitan Police Commissioner Mark Rowley and Greater Manchester Police Chief Constable Stephen Watson said they decided to take a tougher stance after Bondi Beach and an Oct. 2 attack on a Manchester synagogue that left two
people dead.
“We know communities are concerned about placards and chants such as ‘globalize the intifada,’ and those using it at future protests or in a targeted way should expect the Met and GMP to take action,” they said in a joint statement released Wednesday. “Violent acts have taken place, the context has changed — words have meaning and consequence.”
In the hours before Wednesday night’s demonstration in support of Palestine Action, a pro-Palestinian group that was banned as a terrorist organization earlier this year, London police warned protesters to be aware of the earlier announcement.
Two protesters were arrested for “racially aggravated public order offenses” after they shouted slogans calling for intifada during the protest outside the Ministry of Justice on Wednesday night, the Metropolitan Police Service said on social media. A third person was arrested for trying to interfere with the initial arrests.
The term “intifada” is used to describe two major Palestinian uprisings against Israeli policy in the West Bank and Gaza Strip, the first beginning in 1987 and the second beginning in 2000.
During the recent conflict in Gaza, the slogan “globalize the intifada” has been widely used by pro-Palestinian protesters around the world.
The debate over such language comes after hate crime and online abuse soared in Britain following the attack on Israel on Oct. 7, 2023, and the Israeli military campaign in Gaza that followed.
More than 70,660 Palestinians have been killed during the ensuing Israeli campaign in Gaza, according to the territory’s Health Ministry.
