Crackdown on Dollar Mafia Underway, Dollar to Drop to Rs 270 Soon: Malik Bostan

Key meeting with DGC, ISI Lt Gen Faisal Naseer

Bostan raised concerns over the new surge in the

US dollar rate and linked it to currency smuggling

Business Reporter

Islamabad: Co-Chairman of the Exchange Companies Association of Pakistan, Malik Muhammad Bostan, on the evening of July 22, 2025, held a key meeting with Director General (Counterintelligence) of ISI, Lt Gen Faisal Naseer, at his Islamabad office. During the meeting, Bostan raised concerns over the renewed surge in the US dollar rate and linked it to currency smuggling operations.

Smuggling from Iran and Afghanistan Blamed
Bostan informed General Naseer that currency smuggler mafias from Iran and Afghanistan are once again actively trafficking US dollars and other foreign currencies. He also highlighted how these mafias operate outside legal exchange companies across major Pakistani cities, enticing customers with higher black market rates and diverting them away from legal channels.

Black Market Distorting Currency Supply
Due to these illegal practices, customers avoid official exchange counters, which has led to a drop in the legal supply of US dollars. This shortage has directly impacted the rising value of the dollar in the open market.

FBR Policy Encouraging Hoarding
Bostan also criticized a recent Federal Board of Revenue (FBR) rule that imposes tax on sellers if transactions over Rs 200,000 are conducted in cash. He claimed that this policy has pushed non-filers to hoard foreign currency from the black market to avoid detection.

Call for Dollar Purchase Tax Exemption
He proposed that the government exempt the public from tax on purchasing up to $2,000 in foreign currency, in line with an existing State Bank circular. This, he believes, will help reduce dollar demand and bring down the exchange rate.

DGC ISI Orders Immediate Crackdown
In response to these concerns, General Faisal Naseer assured that the matter would be discussed with the federal government. He also ordered law enforcement agencies to initiate an immediate crackdown on currency smugglers, resulting in underground operations halting temporarily.

FIA Raids Yield Immediate Results
Following intelligence reports, the FIA conducted large-scale raids on July 23, targeting illegal currency operations. These efforts quickly impacted the market, bringing the open market rate of the dollar down from Rs 288.60 to Rs 288, and the interbank rate from Rs 285 to Rs 284.80.

Forecast: Dollar Could Fall to Rs 250
Bostan expressed optimism, predicting that continued crackdowns could reduce the dollar rate to Rs 270 or even Rs 250 in the near future. He urged citizens not to buy dollars at this stage and advised those holding dollars to sell them immediately before rates fall further.

Regional Comparison and SBP Strategy
He noted that Pakistan’s rupee is still undervalued compared to neighboring countries—Afghanistan (70), India (95), and Bangladesh (82). The State Bank of Pakistan has already bolstered reserves to $20 billion by purchasing $9 billion from the interbank market over the past nine months. With these purchases halted, Bostan anticipates further declines in the dollar rate.

Appeal to the Public
Concluding his statement, Bostan appealed to the public to support the crackdown by selling their dollar holdings. This, he said, would help stabilize the rupee, strengthen the national economy, and improve foreign exchange reserves.