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Millions in US dollars smuggled into Afghanistan from Pakistan daily

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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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IEA should respond to Pakistan’s security concerns with concrete actions: Andrabi

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Pakistani Foreign Ministry spokesman Tahir Hussain Andrabi says both Pakistan’s Prime Minister Shehbaz Sharif and Sadyr Japarov, the President of Kyrgyzstan, who visited Islamabad on Thursday, expressed their mutual commitment to a peaceful, stable Afghanistan with a sustainable future for the Afghan people.

Speaking in a press conference on Friday, Andrabi stated that both sides agreed that the Islamic Emirate must fulfill its obligations toward the international community and take concrete steps against terrorist groups to address Pakistan’s legitimate security concerns.

This comes while the Islamic Emirate of Afghanistan has repeatedly emphasized that no terrorist groups operate from Afghan territory and that it will not allow anyone to use Afghan soil against any country.

The Islamic Emirate has also stated that Pakistan’s security concerns are an internal issue of that country, and Pakistan itself must take measures to prevent any security incidents.

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Malaysia’s PM calls peaceful solution to Afghanistan-Pakistan tensions

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Malaysian Prime Minister Datuk Seri Anwar Ibrahim has voiced deep concern over escalating tensions between the Afghanistan–Pakistan during a telephone conversation with Pakistan’s Prime Minister Shehbaz Sharif.

In a statement posted on Facebook, Anwar said he emphasized Malaysia’s concerns regarding regional stability and urged all parties to pursue a peaceful resolution through dialogue and diplomatic engagement to prevent further escalation.

His remarks follow media reports indicating heightened tensions between Afghanistan and Pakistan after a series of attacks in October.

During the call, the two leaders also exchanged views on several aspects of Malaysia–Pakistan bilateral relations.

Anwar also briefed Sharif on the ongoing flood situation in Malaysia and similar challenges facing neighboring countries, including Indonesia and Thailand.

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Afghanistan makes major strides in cutting drug trafficking, says Putin

Putin stated that Afghan authorities have “substantially reduced” opium cultivation and are “seriously confronting” drug-related threats from within their borders.

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Russian President Vladimir Putin says Afghanistan has taken “active and effective” steps to curb drug trafficking, noting a significant drop in opium production across the country. He made the remarks during an exclusive interview with India Today during his India trip, highlighting what he described as “visible progress” in Afghanistan’s internal security efforts.

Putin stated that Afghan authorities have “substantially reduced” opium cultivation and are “seriously confronting” drug-related threats from within their borders. He added that Afghanistan has also made important advancements in the fight against terrorism.

Responding to a question about why Russia officially recognized the Islamic Emirate, the Russian president said Afghanistan had been engulfed in civil conflict for many years, but the current authorities now hold control over the country. “This is the reality, and it must be acknowledged,” Putin emphasized.

He further noted that maintaining contact with Afghanistan’s leadership is crucial for shaping events inside the country. “If you want influence, you must engage with the people in charge — and that is exactly what we are doing,” he said.

Putin’s remarks come as several regional powers continue to recalibrate their diplomatic strategies toward Afghanistan, focusing on stability, counterterrorism, and economic cooperation.

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