The dollar will fall to Rs250 against the rupee, former Federal Board of Revenue chief Shabbar Zaidi said, as the local currency strengthens in the money market following a crackdown on illegal money exchangers.

“Our dollar rate should come near to Rs250 and hopefully it will come if the demand for $6 to $6.5 billion or even $4 billion, which was in our market for Afghanistan, ends after the government action,” he said in an interview with Rubaroo that was aired on Aaj News on Friday.

The dollar fell to Rs282.69 against the rupee on the last day of the business week, according to the State Bank of Pakistan. The caretaker government believes the rupee appreciation was due to the crackdown on dollar hoarders and illegal money exchangers.

The dollar scaled to a record high against the rupee last month after it rose above Rs306.98. But it fell on September 7 after the government announced a crackdown on the illegal currency market.

The government has assured the International Monetary Fund of ensuring no abnormal premium emerges between the rate of interbank, open, and informal markets.

When asked, Zaidi attributed two actions of the government to the rupee’s stabilisation. Firstly, he said the government was “strictly managing” the transactions of exchange companies and trying to stop the flow of money to Afghanistan from their dealing. He added that strictness was seen in Peshawar and Quetta – the two provinces that share a border with Afghanistan – and stopped all cash transactions.

The second decision was to gradually evict the exchange companies from the system, he said, adding that all leading banks have already announced that.

Zaidi, who served as the FBR chairman in the PTI government’s tenure, explained that the demand for dollars Was for the trade under the Afghanistan-Pakistan Transit Trade Agreement or for the import of Afghan items.

He shared that the recorded import of Afghanistan, now ruled by the interim Taliban government, was $8.5 billion and the country has exports of less than $1 or $1.5 billion dollar including remittance. “So they [Afghanistan] use around $6 to $6.5 billion of ours for running their government,” said Zaidi.

He went on to add that the government has issued two statutory regulatory orders – an administrative regulation promulgated pursuant to authority. Under SRO No. 1397, Zaidi said the government has imposed a ban on $4 billion worth of five items that were being sold via Afghan Transit Trade. Moreover, an embargo has been imposed on five export items of Afghanistan.

“So for so long we had a loophole that is now closed,” the ex-FBR chief said.

When asked about the increase in basic commodities despite a ban on items, he was of the view that the government has made some priorities to control the situation. The first priority was exchange companies, followed by the Afghan Transit Trade, controlling wholesalers and retailers.

He described the last step as “very difficult”.

Zaidi went on to add that it was easy for caretakers to impose policies as compared to politicians as they don’t have any political stake involved.

“I will explain to you that when exchange companies were summoned by a prominent Pakistani, I don’t know exactly but the comparer told me, that he called everyone and told them that I wanted to see a dollar at Rs250. The meeting is finished. Thank you very much please leave the room,” he said.

The former FBR chairman mentioned the “tone” and said that the same was needed to register the shopkeepers.

He shared his past experience, saying that he conducted a meeting with traders at the ISI’s Aabpara headquarters when he was the FBR chairman in the presence of a “powerful man of Pakistan”.

Zaidi was of the view that the tone in that meeting was “compromising” as he was asked to find some way to find a solution as the country cannot have a law and order issue.

He reiterated that it was about the tone. “The powerful man can summon 50 leaders of shops and tell them I don’t want to see smuggled goods and I don’t want to see under invoice goods in 24 hours. Thank you very much. The meeting is adjourned,” he said.

The FBR chief claimed that Afghanistan was not against such a decision, adding that it was local shopkeepers who didn’t want to dissatisfy politicians as they were their vote bank.