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Conditions conducive for
KARACHI, October 29 (Internews): About
$200 million cash inflow has been
witnessed in Pakistan's open market since the Sept 11 events in the
United States, drastically cutting the spread between official and kerb
Punters here hope that the influx of dollars will increase through the
banking channel further, eradicating the much-organised 'hundi' and
'hawala' system of remitting money by non-resident Pakistanis from
The value of the Pakistani rupee has improved considerably since Sept 11
since the flow of the greenback in the country has increased both from
external and internal resources.
The rupee gained nearly 3.2 per cent to 62.05 at the inter-bank market
and 7.4 per cent to 62.70 at the open or kerb market since September 11.
"The gap between the official and kerb market has reduced sharply after
decades and would help curb the 'hundi' and 'hawala' system in the
country, strengthening the value of Pak rupee and the foreign exchange
reserves," says Anwar Jamal at Galaxy International, a currency dealer
He said the inflow from non-resident Pakistanis has improved in the last
three weeks. Moreover, local investors, in anticipation of making money
through investment in the foreign exchange market, have also sold their
Jamal pointed out that several customers have sold the greenback as the
dollar tumbled sharply. However, the government is expected to see a big
jump in the national saving scheme numbers for September and October, as most of the rupee flowed towards these schemes.
"During the crisis period, the government's sore point has been the
rupee-dollar parity," says Zaheeruddin Khalid, a banking analyst at AKD
However, the prime factor in the strengthening of the currency is the
purchase of rupees in the Middle East markets, for fear of a crackdown
on the 'hawala' or 'hundi' systems, he adds.
According to a currency dealer here, around $3 billion worth of
remittances come through 'hundi' channels in the Pakistan every year.
The main reason in the past was the difference between the official and
kerb market rates and also the fact that these operators quickly
delivered the cash at the doorsteps as compared to the banking channel,
which took a longer time to release the amount.
After the reduction in the dollar-rupee parity, remittances to Pakistan
are likely to show a growth of at least 30 per cent in the 2001-2002
fiscal year over the $1.1 billion recorded in the last fiscal.
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