Traders in Afghanistan demand measures to stop siphoning off US dollars to Iran, Pakistan: Report

Kabul [Afghanistan], January 9 (ANI): Pakistan and Afghanistan are involved in the wide-scale smuggling of USD out of Afghanistan. Money Exchange dealers in Afghanistan's Herat province bordering Iran expressed their concerns over the surge of dollars smuggling to Iran. The local traders in Afghanistan are now demanding bold measures and serious restrictions to stop smuggling of USD through borders, reported Afghan Diaspora Network.
Afghanistan's economy is already under stress with peaking poverty and diminishing employment opportunities.
Da Afghanistan Bank reports indicate that USD 4-5 billion is being smuggled annually from Afghanistan to neighboring countries.
Deputy Chief of Afghanistan Money Exchange Union, Abdul Rahman Zirak, recently said that there is an escalation of smuggling">USD smuggling to Iran and Pakistan. He warned that the increasing smuggling may damage both Afghanistan's economy and domestic currency.
Afghanistan is one such consumer economy that depends on imports of goods from foreign countries while its economy is heavily supported by foreign aid. The majority of such aid flows into Afghanistan in the form of USD which helps the country to preserve the value of its domestic currency, Afghani and avoid severe economic crisis, it reported.
Smuggling USD out of Afghanistan leads to a rise in the price of goods imported from outside, and a reduction in the value of the Afghani currency, which decreases the purchasing power in Afghanistan. Abdul Latif Nazari, Deputy Minister of Economy of Afghanistan said that the smuggling will negatively impact the country's economy; urging relevant authorities to take bold measures against itreported Afghan Diaspora Network.
Afghanistan's other neighbour, Iran is also facing severe shortage of USD. Iran's foreign reserves in 2018 were USD 122.5 billion which dropped to USD 12.4 billion in 2021. The forex crisis here was triggered by withdrawal of the United States from the 2015 nuclear agreement which led to restrictions on Iran's oil exports and international banking relations. The shortage of USD in the country inspires the Iranian smugglers to buy dollar currency from Afghanistan and sell it at a higher price in domestic market.
Concern has been expressed by Kandahar's money exchangers about smuggling">USD smuggling to Pakistan. They claimed that on a daily basis, millions of Pakistani rupees are brought to Kandahar by smugglers to buy dollars and transfer the same to Pakistan, reported Afghan Diaspora Network.
This comes as Pakistan's economy faces one of its worst crises as the country's foreign exchange reserves have fallen to a critical level of USD 4.5 billion, warned The Federation of Pakistan Chambers of Commerce & Industry's (FPCCI) Businessmen Panel (BMP), according to Pakistan based The Frontier Post newspaper.
FPCCI former president and BMP Chairman Mian Anjum Nisar said that the number is likely to drop further amid debt repayment obligations of more than USD 8 billion in the first quarter of 2023.
According to an Al Arabiya Post, the recent unearthing of unabated smuggling of US dollars to Afghanistan using orange crates has sent ripples among the policymakers in Islamabad. Policymakers in Pakistan are alarmed by the failure of the enforcement agencies to put an end to currency and goods smuggling.
Recently, Pakistan's Finance Minister Ishaq Dar chaired an emergency inter-ministerial meeting to review the smuggling and asked relevant authorities to come up with a roadmap to stop the cross-border smuggling and to protect Pakistan's economic and financial stability. (ANI)