Black market booms in Pakistan as dollar becomes hard to find
Amid the ongoing currency fluctuations in cash-strapped Pakistan, a black market for dollars has sprung up in Pakistan after the State Bank of Pakistan (SBP) restricted access to foreign currency to preserve depleting reserves — which plunged to a four-year low of $6.7 billion, Bloomberg reported Saturday
It was discovered that clients could still purchase the dollar on the black market at a rate roughly 10% higher than the one given in the regular one, despite the money-changing enterprises’ claims to the contrary, despite current exchange rates being displayed outside their establishments.
The rise of a parallel market and the lack of foreign currency have contributed to Pakistan’s lengthy list of problems, which already include the aftermath of devastating floods, instability in the economy, and political unrest.According to Asmat Ullah, CEO of Ravi Exchange Company Pvt, a money-exchange company with offices in Lahore, “A third market has now developed and has grown extremely substantial.”
According to him, the interbank foreign exchange market and money-changing businesses are the first two markets.
A request for comment from the journal was not immediately answered by Pakistan’s central bank.
With almost 33 million people affected by floods and more than $30 billion in damage, 2022 was a roller-coaster year for Pakistan.Although the currency has lost more than a fifth of its value against the greenback this year, the dollar premium in the illegal market may also signal more weakness going forward for the country’s rupee