Govt introducing law to punish those who hoard foreign currencies

Culprits to face jail time, fine

ISLAMABAD (Dunya News) – As the government is all set to table the budget for next fiscal year before the National Assembly on Friday (today), a law is also being introduced to curb the trend of hoarding US dollar and other important foreign currencies, sources say.

The move is certainly in response to the dollar/ foreign reserves shortage Pakistan is facing, making it vulnerable to external pressure – like the harsh conditions set by the IMF (International Monetary Fund) – at a time when bridging budget deficit amid payment of external debt has become a challenge.

According to the proposed legislation, any person or organisation involved in hoarding foreign currencies would face imprisonment and fine, the extent of which would be clear after the document is presented before the House.

Meanwhile, other intended legislations are related to transfer of US dollars [and other foreign currencies] from or to the country, the sources said.

Thus, the government, in a bid to enhance foreign reserves, is now allowing anyone travelling to Pakistan to carry $100,000 with him or her without a need to declare the source of income.

Currently, the limit stands at Rs500,000, meaning that the value of foreign currency should not exceed this amount in local currency.

Smuggling of and hoarding of dollars are one of the main reasons why Pakistan is facing this financial crunch, thus skyrocketing the dollar exchange rate – both in interbank but especially in open market.

The huge difference between the official rate and the price offered in open market is also encouraging black marketing [hawala and hundi], forcing the government to take strict measures for reversing the practice.