Pakistan’s ISI Targets Black Market Dollar Trade to Stabilize Rupee, Says Forex Association President

Pakistan’s Inter-Services Intelligence (ISI) agency has intensified efforts to stabilize the nation’s currency by targeting the illicit dollar trade. Malik Muhammad Bostan, chairman of the Exchange Companies Association of Pakistan, reported that a deputy chief from the ISI met with currency exchange firms earlier this week to address the sharp decline of the Pakistani rupee. This intervention led to a crackdown on black market dollar trading, resulting in the rupee appreciating by one rupee against the dollar on Thursday.

This marks the second such intervention in two years, following a similar military-led effort in 2023 aimed at curbing speculative currency trading. The ISI, operating under Pakistan’s powerful military, has not officially commented on the recent move.

The crackdown has had a significant impact on the open market. Bostan noted that the dollar’s value decreased by one rupee, attributing this to the increased supply resulting from the intervention. This development has provided relief to currency exchange firms and the broader economy, which has been grappling with currency volatility.

The Pakistani rupee has experienced fluctuations in recent months. In March 2025, the rupee dipped to Rs281 against the dollar in the interbank market, influenced by rising demand due to higher debt servicing and repatriation of profits by foreign investors. Currency experts observed that this depreciation was controlled, with the exchange rate remaining relatively stable over the past year.

Despite global trends, the rupee has shown resilience. In December 2024, it ended the year on a strong note, poised for its first annual gain against the US dollar in nearly a decade. This stability was attributed to a stable external account, higher remittances, and rising exports under tight fiscal and monetary policies.

The government’s proactive measures, including the recent crackdown on the black market dollar trade, have been instrumental in stabilizing the rupee. These actions reflect a concerted effort by both civil and military leadership to address economic challenges and restore confidence in Pakistan’s financial system.

The situation remains dynamic, with ongoing efforts to monitor and regulate currency markets to ensure economic stability. Stakeholders continue to advocate for measures that address both the symptoms and root causes of currency volatility, aiming for sustainable solutions that support Pakistan’s economic growth and development.