Following the recent federal budget, there are discussions within the government regarding the introduction of a dollar amnesty scheme. This scheme aims to provide individuals with the opportunity to legalize their black money holdings, while also helping banks increase their dollar deposits. However, the proposed scheme is expected to have both positive and negative implications.
The amnesty scheme would allow individuals to convert their black money into dollars, effectively “whitening” their previously undisclosed assets. While this could potentially increase dollar deposits in banks, it raises concerns about the source of funds being used to purchase dollars from the open market. Since the scheme allows for the use of non-dollar assets to acquire dollars, individuals may resort to purchasing from the open market to fulfill the requirements of the amnesty scheme.
An analyst highlighted the need to address the issue of dollar smuggling to neighboring countries, particularly Iran and Afghanistan, in order for any amnesty or dollar reserve-boosting measures to be effective. The individuals involved in smuggling dollars from Pakistan to Iran and Afghanistan, commonly known as “Langri,” play a significant role in draining the country’s foreign currency reserves. These smugglers transport various products from Afghanistan to Pakistan on small vehicles or bikes and then carry dollars back to their respective destinations.
It has been alleged that Indian companies, banks, and their agents are major buyers of dollars in Iran and Afghanistan. Reports suggest that Indian buyers are purchasing dollars at a premium of 15 to 20 percent compared to prevailing rates in Pakistan.
The issue of dollar smuggling and the involvement of external entities in purchasing dollars at inflated rates pose significant challenges to the government’s efforts to stabilize dollar reserves and combat the circulation of black money. Addressing these underlying issues is crucial for any amnesty scheme or other measures aimed at boosting dollar reserves to yield sustainable results.
As discussions continue within the government, further details regarding the potential dollar amnesty scheme and measures to tackle dollar smuggling are expected to emerge in the coming weeks.