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In a significant development for Pakistan’s currency market, Exchange Companies Association of Pakistan (ECAP) Chairman Malik Bostan has stated that the US Dollar is expected to fall sharply against the Pakistani Rupee following an aggressive crackdown on illegal currency trading and smuggling.
During a televised interview on Wednesday, Bostan said that the greenback, which had been fluctuating around the Rs. 285–295 mark, could fall to Rs. 280 or even Rs. 270 in the coming weeks. The development, if realized, could offer some much-needed stability to the volatile forex market and ease inflationary pressure in the economy.
Crackdown on the Black Market Spurs Optimism
According to Bostan, the Pakistani government, aided by intelligence agencies, has recently intensified efforts to curb black market currency operations. This includes direct engagement with exchange companies, intelligence-based monitoring, and raids on illegal hoarding networks.
Just a day earlier, Reuters reported that a senior intelligence official met with representatives of currency exchange companies to discuss the recent rupee depreciation and rampant illegal trading. The official reportedly assured cooperation in bringing discipline and transparency back to the market.
Bostan praised the government’s actions, stating that the crackdown has improved dollar liquidity in the formal market and restored confidence among legitimate traders.
Improved Dollar Availability at Exchange Companies
The ECAP chairman also confirmed that dollar availability had been an issue in recent weeks, leading to speculative panic and sharp exchange rate fluctuations. However, he added that the situation has now normalized.
“The issue of dollar scarcity is now resolved. Exchange companies have regained access to sufficient dollar reserves, and customers will no longer face hurdles in legitimate transactions,” Bostan said.
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This renewed availability is expected to reduce pressure on the open market rate, which often rises due to excessive demand and speculative buying driven by artificial scarcity.
Conflicting Views: Analysts See Mixed Outlook
While Bostan’s remarks bring a wave of optimism, not everyone shares the same sentiment. A recent poll conducted by a financial news outlet showed a divided analyst community regarding the rupee’s future trajectory.
- A minority of analysts agree with ECAP’s view, predicting the rupee to strengthen and hover between Rs. 270 to Rs. 280 by year-end.
- However, the majority expect the rupee to remain in the Rs. 285–290 range.
- Some bearish projections even suggest the rupee may slip past Rs. 300 against the dollar by December 2025, especially if external financing gaps persist or political uncertainty grows.
Factors Supporting Rupee Stability
Several developments may support the rupee’s stability and Bostan’s prediction:
- Improved inflows from remittances and exports following recent IMF loan approval.
- Crackdown on hawala/hundi networks and illegal cross-border money transfers.
- Saudi and Chinese deposit rollovers and resumption of oil facility support.
- Stronger FX reserves, which recently crossed the $9 billion mark, adding buffer against currency shocks.
Additionally, the State Bank of Pakistan (SBP) has committed to maintaining a market-based exchange rate while ensuring speculative manipulation is kept in check.
Public Reaction and Market Response
The market has responded cautiously to these forecasts. Following the news of the crackdown and ECAP’s statement:
- The interbank rate remained steady near Rs. 286.
- The open market rate showed minor appreciation, with some exchange dealers quoting Rs. 283–284 for the dollar.
- Foreign exchange hoarding activity has slowed, according to multiple reports.
Retail investors and traders are now closely monitoring the situation, especially as new government economic policies are expected to be announced in August.
Conclusion: Is Relief in Sight for the Rupee?
While Malik Bostan’s forecast of a dollar drop to Rs. 270 may appear ambitious, the ongoing clampdown on illegal forex trade, along with improved dollar availability, could provide short-term relief to the rupee.
However, macroeconomic fundamentals, external debt obligations, and political stability will continue to influence the long-term outlook. For now, confidence-building steps taken by regulators and the intelligence community have set the tone for a more stable currency environment—if they are sustained.
