KARACHI, Sept 26: Many currency dealers, it is believed, indulge in illegal currency business and are sending millions of dollars daily out of the country.

Transferring dollars without informing the State Bank of Pakistan is illegal, but the money changers help anyone who wants to send dollars abroad. The illegal currency trading has been in practice for years however it was restricted to some an extent after the 9/11 when the US authorities made it difficult to transfer money without documentation.

It is difficult to give exact amount which is being transferred through this illegal channel, but some currency experts guess that it could be ranged $2 to $5 million a day.It is not difficult to find people who help to send the dollars abroad. They charge at a certain rate and even bargaining is possible.

The State Bank has tough laws but is not vigilant enough to stop this illegal transfer of money.

“At this stage if $1 to $1.5 billion is sent abroad in a year, it is enough to bring the country under immense pressure of borrowing and weakening of the rupee,” said Atif Ahmed, a currency expert.

The currency dealers in the open market said capital flight was going on from across the country.

They said the highest amount of money was being transferred illegally from the NWFP due to serious law and order situation which had not only stopped investment in the province but caused flight of foreign investment.

“The NWFP in terms of individual riches is the richest province as undocumented wealth is much larger than the disclosed wealth. This is the reason that highest capital flight is taking place from the province,” said a currency dealer.“Most of the money is sent to Dubai,” said a currency dealer. However he did not know whether this money was being invested or being deposited in banks.

The remittances by overseas Pakistanis have increased by 24 per cent in the last two months, but still the open market is receiving dollars from individuals in much bigger number.

The open market dealers said Ramazan-related dollar inflows through Hundi system were on the higher side this year because the open market was offering better exchange rates.

Meanwhile, during the first two months (July-August) of the current fiscal, the demand of UAE dirham was suddenly increased mainly because of the real estate slump in Pakistan and ever increasing attraction for investing in Dubai.