Reemergence of grey market brings back memories of 2023

The grey currency market — which functions outside the ambit of regular remittances channels — has reemerged due to an uptick in the smuggling of dollars to neighbouring countries, experts have said. The market is attracting about $500 million per month by offering an exchange rate of Rs4 per dollar higher than the official rate, according to the Exchange Companies Association of Pakistan General Secretary, Zafar Paracha. “The grey market is offering about Rs284 per US dollar. The rate is higher by Rs4 per dollar compared to the open market rate of Rs280,” he said. According to currency dealers, the grey market, which was partially controlled following an extensive government crackdown in 2023, has reemerged due to the smuggling of dollars to Afghanistan and Iran, which created a higher demand for the currency in the local market.