Traders and smugglers are transferring as much as $5 million across the Pakistani border and into Afghanistan every day, Exchange Companies Association of Pakistan General Secretary Zafar Paracha said in Bloomberg interview.
“Without a doubt, money is being illegally transferred. This has grown to be quite a successful enterprise,” he said, adding that Pakistan’s “flawed” border controls, immigration, and trade policies are to blame.
As a result of the US and Europe denying the Taliban leadership access to billions in foreign reserves, the report stated that the smuggling of cash provides some support for the constrained economy.
“The illicit flows show how the Taliban are evading sanctions after their 2021 takeover of the country”.
However, it noted that “for Islamabad, the outflows are exacerbating a rapidly developing economic crisis.”
Paracha’s remarks come as the Pakistani rupee continues to take a beating with the State Bank of Pakistan (SBP) held foreign exchange reserves have been sharply depleted. On Tuesday, the rupee reached a close to all-time low against the dollar at Rs276.28. The SBP’s foreign exchange holdings also experienced a $592 million decline, falling to a critical $3.09 billion level as of January 27.
Bloomberg quoted Alpha Beta Core CEO Khurram Schehzad as saying that Afghanistan needed about $10 to $15 million daily and half of this amount comes from Pakistan.
Meanwhile, Haseeb Noori, spokesman of Taliban-run Da Afghanistan Bank, stated that the neighboring nation had enough dollars in reserve to support the economy, some of it coming from the UN, which has been providing about $40 million in humanitarian aid each week since last year.
