KARACHI: With the passage of anti-money laundering bill unlicensed money changers disappeared from the markets which increased the counter selling of US dollars by 30 to 40 per cent, currency dealers said on Saturday.

They said that since the move started for the passage of the bills against the money laundering, the illegal currencies traders went underground. The currency dealers said the passage of FATF bills from Senate and National Assembly on September 16 suggests punishment for money laundering including smuggling and illegal trading of currencies up to 10 years.

Thousands of unlicensed money changers are operating across the country and helping in the illegal transfer of foreign currencies from the country.

“During the last two days the dollars selling at the counters reached around $6 to $7 million per day which usually is on average about $4 million per day,” said Malik Bostan, President Forex Association of Pakistan.

40pc jump in kerb selling of dollars, claim dealers

He said fear is high among the unlicensed money changers which increased liquidity in the open market. He said an unlicensed money changer has been punished by a court in Peshawar indicating that the government is willing to eradicate the menace of currency smuggling and illegal trading in the country.

“The Anti Money Laundering legislation will stop smuggling of currencies, ban illegal trading, increase dollars and other currencies in open markets and banks while it will also bring stability in the exchange rate,” said Jamal Ibrahim, a currency dealer in Karachi.

Former general secretary of Exchange Companies Association of Pakistan Zafar Paracha said the legislation will “definitely bring change in the currency market.”

“There is clear threat for the illegal trading and smuggling of the currencies in Pakistan and I believe the government would not tolerate this illegal business which has put Pakistan in grey list,” said Mr Paracha.

He said the passage of legislative amendments could help the country exit the grey list and establish a stable exchange rate market based on true valuation of currencies.

He said the country could expect higher remittances with the passage of legislative amendments “since the foreign exchange will come only through legal channels while it could also help reduce the difference between dollar rates in the open and inter-bank market.”

Published in Dawn, September 20th, 2020