The dollar galore in grey market

THE army-backed crackdown on illegal dollar trade appears to have stopped the black market activities in the country’s foreign exchange market — at least for now. Money changers say there are more sellers in the market now than buyers as the ‘confidence in the home currency returns’, with the dollar weakening in the interbank by nearly five per cent from its historic peak of 307.10 earlier this month. With a ‘disappearing’ black market, the retail dollar rate has also plummeted, and the gap between the interbank and retail rates narrowed to within the International Monetary Fund-mandated 1.25pc band. The government launched the crackdown against illicit dollar market and hoarders following the army chief’s back-to-back meetings with the businessmen in Karachi and Lahore, where he promised them to curb smuggling and rein in the consistently deteriorating exchange rate due to unprecedented growth in illegal dollar trade. Following these meetings, the Federal Investigation Agency started raiding exchange companies across the country, especially in Peshawar, Karachi, Lahore, and Islamabad, shut down scores of shops, and arrested several people involved in illegal transactions.