While the Federal Investigation Agency (FIA) is taking all-out measures against illegal currency business, pressure on the exchange rate has refused to ease out as dollar reached a record high of Rs181.3 in the open market
FIA DG told during December alone the agency had arrested 158 people and seized local and foreign currencies worth Rs300 million across the country in an effort to stabilize the rupee against the greenback. crackdown on those involved in illegal currency business was launched against the backdrop of the fear that dollar was being hoarded and smuggled out of the country.
There are other national and international variables and macro and micro economics which deal with appreciation and depreciation of any currency and these are being taken care of by the government, particularly the SBP and the finance ministry,” he replied cautiously.
Dr Abbasi divides the FIA’s campaign into two phases. According to him, the first phase, from Aug 25 to Nov 30, began soon after the change of regime in Afghanistan. “FIA registered 92 FIRs, conducted 40 inquiries, arrested 107 persons, sealed 21 shops and recovered Rs365m, including foreign currency worth Rs156m.”In the second phase, from Dec 1 till date, the FIA registered 117 FIRs, conducted 32 inquiries, arrested 158 persons, sealed nine shops and seized Rs300m, including foreign currency worth Rs88m.The FIA chief said the total amount of money seized during this year stood at Rs1.3 billion.
The interbank market data for the last one week shows that the rapid decline in the value of the rupee has eased and some semblance of stability in the exchange rate is returning. But for how long? With the current account deficit growing to more than $7bn or 5.3pc of GDP from July to November, against the State Bank’s revised projection of 4pc for the entire year, and the monthly headline inflation numbers hovering in double digits, it is naïve to expect the rupee to strengthen in the immediate term. This is so despite the recent statements of Finance Minister Shaukat Tarin that the home currency is overvalued by around 8pc or more. The markets have their own way of reacting to economic developments.
Even though the rupee gained some lost ground after Riyadh announced a $4.2bn assistance package for Islamabad towards the end of October, the sentiment didn’t last long since the economic fundamentals were weak. Many expect the market to stabilise further once the IMF programme resumes next month and the dollars start flowing in.
