Pakistani food importers at the mercy of gray market due to dollar crisis: report

Pakistani importers of food from Afghanistan and Iran rely on the gray market to make their payments as they are not allowed to buy dollars from banks or currency exchange companies, according to a media report on Sunday. .

Pakistan is facing a severe shortage of tomatoes, onions, potatoes and other food items after floods destroyed crops, pushing prices to unprecedented levels across the country.

This situation forced the government to immediately allow imports of these foodstuffs from neighboring countries to fill the gap between supply and demand, but it made no provision to provide dollars to pay for these imports. , reported the Dawn newspaper.

The report showed that it is quite interesting to ask importers to enter into barter agreements with their Afghan and Iranian counterparts by exporting food products available in Pakistan.

A barter transaction is the exchange of goods or services, in exchange for other goods or services.

Sources from the Peshawar Chamber of Commerce and Industry told the newspaper that local currency import deals were possible with Kabul as Afghans were available in Khyber Pakhtunkhwa.

However, the sources maintained that Afghan exporters usually ask for US dollars and insist on paying in cash or making payments through Dubai. For payments in Dubai, the hundi or hawala system is used.

Hawala is an informal funds transfer system that allows the transfer of funds from one person to another without the actual movement of money.

Malik Bostan, a leading currency dealer, said most importers pay Afghan sellers in dollars or through Dubai.

“The government has not arranged dollars for imports from Kabul while importers are not allowed to buy dollars from exchange companies or banking channels. This is the case of Iran and Afghanistan,” Bostan explained.

He said that in both cases, dollars from Pakistan are being sent abroad when “we badly need them”.

Afghan currency is only available in Peshawar where exchange or buying and selling is possible in Pakistani and Afghan rupees, said Zafar Paracha, a currency trader.

He argued that Afghan exporters were not prepared to sell their goods for Pakistani rupees as the local currency was facing sharp devaluation daily.

“It is an illogical decision by the government not to provide dollars for imports from Iran and Afghanistan when the devaluation of the rupee is now a permanent feature,” Parasha remarked.

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