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Millions in US dollars smuggled into Afghanistan from Pakistan daily
Millions of dollars are being smuggled into Afghanistan from Pakistan every day, providing some support for the fragile economy.
Muhammad Zafar Paracha, general secretary of the Exchange Companies Association of Pakistan, told Bloomberg that traders and smugglers bring as much as $5 million across the border daily, which more than covers the as much as $17 million that Afghanistan’s central bank injects into the market each week.
The illicit cash flows show how the Islamic Emirate of Afghanistan (IEA) is evading sanctions after their 2021 takeover of the country, Bloomberg reported.
For Pakistan, however, it’s contributing to the depletion of foreign reserves and adding to the downward pressure on the rupee as the currency tumbles to record lows and the economy teeters on the edge of collapse.
“Currency is being smuggled without any doubt,” Paracha told Bloomberg. “This has become quite a lucrative business.”
“Afghanistan has about a $10 to $15 million requirement on a daily basis,” said Khurram Schehzad, chief executive officer at Alpha Beta Core Solutions Pvt Ltd., a financial consultancy in Karachi. Half of this is estimated to come from Pakistan, he said.
Da Afghanistan Bank, the country’s central bank, has enough dollars in reserve to support the economy, the bank’s spokesman Haseeb Noori told Bloomberg.
However, some of it comes from the UN, which has been providing about $40 million in humanitarian aid each week since late 2021.
This cash is transported by air to Kabul each week and much of it then needs to be converted into afghani after it arrives. So even though the aid doesn’t directly benefit the IEA, the dollars ultimately end up in the central bank’s coffers, Bloomberg reported, adding that the UN wasn’t immediately available to comment.
According to the report, the afghani has gained about 5.6% against the US dollar over the past year through Monday, one of the strongest performances of any currency in the world.
This while Pakistan’s rupee has lost about 37% against the US currency over the same period, one of the largest declines. It fell about 10% in one day in late January, the biggest drop in at least two decades, as the crisis-stricken government relaxed its grip over the exchange rate in a bid to win much-needed loans from the IMF, Bloomberg reported.
However, according to Bloomberg, the smuggling of US dollars into Afghanistan really took off in the middle of last year after Afghanistan increased coal exports to Pakistan.
In addition, it has been boosted by the IEA’s ban on the use of Pakistan’s rupee as legal tender in Afghanistan, which forces exporters to trade in dollars and bring the US currency back to the country, the officials told Bloomberg.
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Pakistan orders undocumented Afghan nationals to leave by July 10
Pakistan has set July 10 as the final deadline for undocumented Afghan nationals to leave the country, with authorities ordered to launch a nationwide crackdown on those who remain without legal status after the deadline expires.
The Ministry of Interior has instructed provincial governments, police chiefs and the Islamabad administration to strictly enforce the directive. From July 10, officials will begin operations targeting Afghan nationals living illegally in Pakistan, while anyone found without valid documentation faces arrest.
Starting July 11, provincial authorities will be required to submit daily reports to the Interior Ministry detailing the number of undocumented Afghans identified, the action taken against them, and their legal or custodial status.
The ministry has described the operation as a top priority and called for its immediate implementation across the country.
The announcement comes amid heightened tensions between Pakistan and Afghanistan over security concerns. Pakistani authorities have repeatedly accused militant groups of using Afghan territory to stage attacks, allegations the Islamic Emirate administration has consistently denied.
Earlier this week, Pakistan said a suspected militant arrested after an attack on a Pakistan Rangers Sindh camp claimed to have entered the country from Afghanistan with three accomplices. In a recorded confession released by authorities, the suspect alleged links between the group and Jamaat-ul-Ahrar, as well as support from individuals based in Afghanistan.
The Afghan government has not responded to the latest claims, and the allegations have not been independently verified.
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UNAMA confirms death of 28 civilians following Pakistani airstrikes on eastern Afghanistan
At least 28 civilians were killed and 49 others injured in Pakistani airstrikes on three eastern Afghan provinces late Sunday, the United Nations Assistance Mission in Afghanistan (UNAMA) said on Monday, warning that the toll could rise as hospitals continue treating the wounded.
In a statement, UNAMA said the strikes hit Paktia, Paktika and Kunar provinces on the evening of June 28. Women and children were among those killed and injured, according to the UN mission.
The deadliest attack took place at around 11:30 p.m. in Chamkani district of Paktia province, where at least 22 civilians were killed and 47 others wounded.
Around the same time, a separate airstrike in Gyan district of neighboring Paktika province killed six civilians. A third strike in Marawara district of Kunar province injured two children.
Pakistan’s Ministry of Information and Broadcasting confirmed that Pakistani security forces had carried out airstrikes in the three Afghan provinces.
UNAMA said it is continuing to verify the incidents and emphasized that the casualty figures remain preliminary.
“The figures are preliminary and may increase as hospitals continue to treat the injured,” the mission said.
The UN mission renewed its call for all parties to comply with international humanitarian law, stressing the principles of precaution, distinction and proportionality to protect civilians during military operations.
UNAMA also expressed its condolences to the families of those killed and wished a speedy recovery to the injured.
Meanwhile, the casualty figures released by the Islamic Emirate are higher. According to the Islamic Emirate, 36 civilians were killed and 163 others injured in the Pakistani military’s recent airstrikes on eastern Afghanistan.
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Afghanistan summons Pakistani diplomat over airspace violations and civilian bombing
Afghanistan strongly protested against the violation of its airspace and the bombing of civilian residential areas, delivering a firm and formal objection to the Pakistani diplomat.
The Ministry of Foreign Affairs of Afghanistan has summoned the Chargé d’Affaires of the Pakistani Embassy in Kabul in response to overnight airstrikes in the provinces of Kunar, Paktia, and Paktika.
According to the Ministry, Afghanistan strongly protested against the violation of its airspace and the bombing of civilian residential areas, delivering a firm and formal objection to the Pakistani diplomat.
The Ministry described the recent attacks as a clear violation of international principles, humanitarian law, and Afghanistan’s national sovereignty, condemning them in the strongest possible terms.
The statement further noted that Pakistan has, over the past few years, attempted to deflect its internal security and political failures by making baseless accusations against Afghanistan.
It added that such actions not only fail to address existing challenges but also seriously damage bilateral trust, good neighborly relations, and regional stability.
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