UAE dirham shortage hits Pakistan's open market

KARACHI: The open market is facing a shortage of UAE dirhams (AED) after the Gulf state made it mandatory for Pakistani travellers to declare 5,000 dirhams at the airport at the time of landing.

Pakistan's currency market is falling short of the AED due to the latest development, according to a Daily Dawn report. This has also led to an increase in the price of the US dollar in the open market.

After a long hiatus, the open market is running short on US dollars, which moved up the price as compared to the interbank rate of the greenback.

President Exchange Companies Association of Pakistan (ECAP), Malik Bostan, told the publication that 21 flights from Pakistan land in Dubai each day, carrying a total of 4,200 Pakistanis per day who require about 21 million dirhams each day.

“The dirham is not available in the open market while the price has also gone up,” Bostan said, adding: "Those available foreign currencies are exported to Dubai to bring back an equal amount of US dollars."

“Higher dirham demand, in fact, created a shortage of dollars.”

Bostan said a new regulation of the Civil Aviation Authority (CAA) for all passengers to declare cash and jewellery has added to this problem.

“Many people from the Middle East arrive with cash in riyals and dirhams. They also bring cash from their colleagues to directly hand it over to their families in Pakistan. Now, no Pakistani can take this risk,” he said.

Due to these factors, currency dealers said the arrival of foreign currencies in the open market has dropped by almost $3 million per day.