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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.
Zabihullah Mujahid, spokesman for the Islamic Emirate of Afghanistan (IEA), has urged spokespersons of all Emirate institutions to intensify efforts aimed at strengthening information dissemination and expanding cooperation with media outlets.
Speaking at a coordination meeting held on Tuesday at the Government Information and Media Center, Mujahid praised the efforts of institutional spokespersons in sharing information and described their role in improving the effectiveness and coordination of public communication as important.
He stressed the need for continued cooperation and called on spokespersons to play a more active role in strengthening government-related content through media platforms and the Parmakhtag website.
Mujahid also highlighted the importance of media in delivering information, raising public awareness, reflecting realities, and strengthening public trust in the government.
Noorullah Noori, Minister of Borders, Ethnic and Tribal Affairs, says that objectives such as establishing an Islamic system, ensuring security, and achieving national unity in Afghanistan have now been fulfilled, and has called on opponents of the Islamic Emirate living abroad to return to the country.
Speaking at a press conference on Tuesday, Noori addressed opponents of the Islamic Emirate, saying: “If your jihad against the Russians was aimed at establishing an Islamic system, ensuring security, and achieving national unity, then today these objectives have been achieved in Afghanistan. Return to your country and present whatever suggestions or opinions you may have.”
Noori added that opponents of the Islamic Emirate based in Turkey, Pakistan, and several other countries should stop claiming that they seek to “liberate Afghanistan,” because Afghanistan is now a free country. He warned that no one will be given permission or the opportunity to cause bloodshed in the country again.
He urged them to come back to Afghanistan and present any proposals or demands they may have regarding the Islamic Emirate of Afghanistan.
He said: “What is your voice, your message, and your demand? Our country has regained its freedom from occupiers, and today there is not a single foreign soldier present anywhere in Afghanistan. So, from whom do you intend to liberate the country? Return to your homeland and put forward your proposals. The people of Afghanistan have learned from the past. Today, not even a single dead body is seen across Afghanistan, and Afghans neither expect to see coffins again, nor will anyone be given the opportunity to cause bloodshed in this country once more.”
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Khalilzad urges Pakistan to heed UN call for dialogue with Afghanistan
His comments came after Guterres urged all parties to protect civilians and comply with international humanitarian law following Pakistani airstrikes in Afghanistan’s eastern provinces.
Former US Special Representative for Afghanistan Reconciliation Zalmay Khalilzad has called on Pakistan to respond positively to the United Nations’ appeal for dialogue, saying Afghanistan has consistently sought a diplomatic solution to tensions between the two neighboring countries.
In a post on X, Khalilzad referred to UN Secretary-General António Guterres’ call for Afghanistan and Pakistan to end hostilities and resolve their differences through diplomacy.
He said Afghanistan has repeatedly made clear that it prefers dialogue over conflict and has presented several proposals aimed at reducing tensions.
“Will the Pakistani establishment listen to the UN Secretary-General? I hope so, but I am not optimistic,” Khalilzad wrote.
His comments came a day after Guterres urged all parties to protect civilians and comply with international humanitarian law following Pakistani airstrikes in Afghanistan’s eastern provinces of Paktia, Paktika and Kunar.
Speaking on behalf of the UN chief, spokesperson Stéphane Dujarric said the Secretary-General was deeply concerned by the escalation and called on both countries to settle their differences through diplomatic means.
“We continue to call on all parties to uphold their obligations under international humanitarian law and stress that civilians and civilian infrastructure must be protected at all times,” Dujarric said.
The UN Assistance Mission in Afghanistan (UNAMA) said numerous civilians were killed and injured in the overnight airstrikes, while humanitarian agencies warned that the attacks had also displaced families and created urgent humanitarian needs.
According to Afghan authorities, at least 36 civilians were killed and more than 160 others wounded in the strikes, with women, children and elderly people among the casualties.
The Islamic Emirate of Afghanistan condemned the strikes as a violation of the country’s sovereignty and airspace, describing them as a “crime” and a “cowardly act.”
Relations between Kabul and Islamabad have deteriorated sharply in recent months over Durand Line security and militancy, with both sides accusing each other of failing to prevent cross-frontier attacks. The latest exchange has heightened concerns of further escalation, prompting renewed international calls for restraint and dialogue.
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