Former chairman of the Federal Board of Revenue (FBR) Shabbar Zaidi has said that the US dollar could fall to as low as 250 if the government can manage the issues related to Afghan transit trade.
Speaking to Geo News, Zaidi said that Afghan transit trade has an impact of almost $6 billion on Pakistan’s imports. He said that if this impact is reduced, the Pakistani rupee would strengthen against the US dollar.
He explained that Afghanistan does not have enough foreign exchange reserves of its own, and all of its imports are financed through dollars obtained from Pakistan through the ‘hawala’ system. He further said that the recent crackdown against currency smuggling and Afghan transit trade are interlinked.
The former FBR chairman appreciated the steps taken in recent days to regulate Afghan trade. He mentioned that the government has notified a new list of items that Afghanistan cannot import through Pakistani sea and border ports under the Pakistan-Afghanistan Transit Trade Agreement.
Similarly, FBR has imposed a 10 percent processing fee on major categories of Afghan transit commercial goods i.e. confectionaries/chocolates, footwear, machinery (mechanical/electrical), blankets/home textiles, and garments imported into Afghanistan in transit via Pakistan.
Moreover, FBR will collect bank guarantees of all Afghan transit goods equal to the total duties/taxes involved on the goods destined for Afghanistan through Pakistan.
Zaidi said that if the Afghan transit trade is effectively managed, 20 percent of problems in Pakistan’s economy will be resolved.
It is pertinent to mention here that after the crackdown against currency smuggling and other illegal activities, the Pakistani rupee became the best-performing currency in the world in September, gaining over 6 percent against the dollar. The crackdown also significantly reduced the open market rate of the dollar, cutting it by as much as Rs 50 in September.
Source: Pro Pakistani