KARACHI: Chairman of the Exchange Companies Association of Pakistan, Malik Muhammad Bostan, has indicated that the crackdown on illegal currency trading and Hawala/Hundi networks has bolstered the Pakistani rupee, suggesting that the U.S. dollar could drop below Rs250 if the efforts persist. Previously, the dollar had surged to Rs340 in the open market but has since decreased to approximately Rs279 due to actions against unlawful foreign exchange operations.

According to Exchange Companies Association of Pakistan, the State Bank of Pakistan, influenced by the International Monetary Fund, has decided to cease the Pakistan Remittance Initiative, a move that raises concerns about the future of remittance flows. Launched in 2009, the PRI scheme was instrumental in elevating remittances through formal channels from US$9 billion to almost US$41 billion annually. Bostan proposed that instead of terminating the program, the government could have reformed the subsidy and fee structures to alleviate fiscal pressures while maintaining incentives for overseas Pakistanis to send money legally.

Bostan also highlighted that the number of overseas Pakistanis has ballooned from approximately five million in 2009 to nearly 15 million today, with an estimated 500,000 to 700,000 Pakistanis seeking employment abroad each year. This has contributed an additional US$2 billion annually in remittances. He noted that Pakistan's foreign exchange reserves have expanded from US$3 billion to about US$22 billion, largely due to the consistent growth in formal remittance flows. Despite the PRI scheme's discontinuation, Bostan expressed confidence that the State Bank of Pakistan and exchange companies would continue to offer affordable and efficient remittance services to ensure the continuity of legal remittance inflows.