Dollar flight to Kabul continues unabated

Confirming what has been known as an open secret for months now, the Exchange Companies Association of Pakistan (Ecap) on Monday said that the country has been facing the large-scale outflow of US dollars to Afghanistan ever since the Taliban’s takeover of Kabul last year. Addressing a presser, Ecap Chairman Malik Bostan noted that this situation had eroded Pakistan’s foreign exchange reserves. The exchange rate has been destroyed by smuggling and fake imports of dollars as well as Islamabad’s negligence towards the issue, he alleged. Mr Bostan pointed out that when the Taliban took over Kabul, one greenback was available for Rs155 and Pakistan’s reserves stood at $22 billion. Now the reserves have sunk to their lowest level in about eight years with a dollar selling for Rs225 in the inter-bank market. This unhindered flow of the American currency towards Afghanistan has created a crisis for Pakistan, he added. Mr Malik said that legally 15 million dollars used to cross each day from Pakistan to Afghanistan since Islamabad has permitted each person to take $1,000 per day while 15,000 people regularly travel to the neighbouring country each day.