Nisar Ahmed
“Woe to every backbiter, slanderer, who amasses wealth (greedily) and counts it (repeatedly). Al-Quran (104:1-2)
Last week, I was accompanying a friend who was looking to exchange some rupees into dollars. I never thought that it would take more than a few minutes of our time, but the reality was entirely different; surprisingly, all the money changers along the avenue were short of dollars! With no alternative options, it was indeed an implausible situation to believe, even then we had to. After this unsuccessful quest, a man whispered in our ears right outside a dealer’s shop, “How many dollars do you need?” At first, he seemed nothing less than an angel, but this feeling went away as quickly as it appeared.. He was willing to deliver us USD at a rate of PKR 210 against an open market rate of PKR 199 and that too without any receipt! I am sad to tell you that the man promising to provide us dollars in black market was no one, but an underground licensed money agent! For me, this raised dubiety about the entire system.
Do we have any law to regulate money dealings? Is there anyone who is closing in against this mafia? If yes, then why the fragility of law was so obvious to us? Does this mean that our regulators are equally impuissant to this mafia as us?
The economics of the undying love for dollars better explains the leveraging role of money changers in jacking up the price per dollar. Repeated balance of payment problem is one sufficient reason for this fall but a lack of concern of State Bank of Pakistan (SBP) towards the speculations by the “key players” is equally alarming and greatly supports why the rupee has witnessed a record high rate of PKR 211 against USD in June 2022, it has approximately depreciated by 100% in a period of less than four years!
SBP was miserably unsuccessful in cushioning this massive plummet despite its frequent practices of pumping billions of dollars into the so-called “free” inter-bank market. Nothing went unexpected; you can never expect otherwise considering the unannounced injection of dollars into a technologically unsophisticated market. Simply put, money agents, having ample knowledge about the meager size of reserves coupled with limited privileges of a weak administration, started amassing USD and established a black market with their own dictatorial terms. This did no good except for depletion of reserves and proved to be a precursor in frequent invisibility of USD from the market.
Is there any antidote that can offer solace to this anxiety? I always quote a famous saying and would repeat here, “where there is a will, there is a way”; in developed economies with limited to virtually zero underground economic transactions, brokers have their accounts linked with the central databases connected to that country’s monetary authority and that information is also made publically available hence leaving no room for any misquotation by the dealers. Then why can’t we enforce the same in Pakistan; certainly, it would not occupy much of the display area of the brokers’ quote screens if they also make some efforts to display the quantity along with the quote for each currency!
If a common citizen can view this problem under the lens of his eye then why those with vigilant lenses are blind to take any action against this mafia, who are successful in escaping the fate of a formidable punishment. The audacity of these dealers in creating this artificial shortage from the market along with widespread public malaise is increasing at the same pace as the dollar rate. Recent Sri Lankan default on its debt repayments is a “huge red flag” for a country like Pakistan; before the outbreak of this news, the Sri Lankan rupee fell massively by 150 rupee from 200 to 350 in the last 3 months. Are we following the footprints of our island neighbor? Does the recent free fall of PKR signal a similar fate? I am hesitant to answer these questions in denial.
