Published on, Aug. 25 -- August 25, 2025 12:52 AM

The ongoing FIA crackdown on illegal dollar sales has once again revealed the fragility of Pakistan's foreign exchange regime. Licensed exchange firms confirm that official dollar sales have collapsed by more than half in recent weeks, as demand migrates back to hawala and hundi networks. With authorities capping cash purchases at $500 without documentation, genuine buyers are forced into the curb market, where the dollar trades at a premium of up to five percent over the interbank rate.

We have to realise how these distortions violate the IMF's programme condition that the interbank-open market spread must remain within 1.25 percent. The persistence of such a gap is diverting remittance...