Tens of millions of dollars have poured back into Pakistan's interbank and openmarkets, dealers say, since raids on black market operators began on Sept. 6.
Ninety percent were going to black market dealers, cutting our supply of foreign exchange," Bostan explained.
While a crackdown on the black market was needed to stabilise the rupee, it "is a temporary fix," said Fahad Rauf, Head of Research at Ismail Iqbal Securities.
High inflation and chronic external deficits lie at the heart of the currency's problem, and closing off people's access to black market dollars risks storing up pent-up demand.
"There is an unprecedented demand for the dollar," Hanifullah Mohmand, a trader in the Peshawar market, said.
Persons:
Akhtar Soomro, Asim Munir, Malik Bostan, Bostan, General Munir, Haji Luqman Khan, Sheikh Allauddin, ECAP, Fahad Rauf, Ismail Iqbal, Ariba Shahid, Mushtaq Ali, Gibran Peshimam, Simon Cameron, Moore
Organizations:
REUTERS, Pakistan, Exchange Companies Association of Pakistan, Reuters, Federal Investigation Agency, FIA, Inter, Services Intelligence, ISI, Locals, International Monetary Fund, IMF, Research, Ismail, Ismail Iqbal Securities, Thomson
Locations:
Karachi, Pakistan, KARACHI, PESHAWAR, Peshawar, Islamabad, Lahore, Quetta, Afghanistan