Dollar Rate Falls in Pakistan After ISI Cracks Down on Black Market

Pakistani Rupee Recovers as ISI Cracks Down on Dollar Black Market

Published: July 24, 2025

Overview

Pakistan’s intelligence agency Inter-Services Intelligence (ISI) has launched a targeted operation against illegal dollar trading in the black market. This bold step has led to a noticeable improvement in the value of the Pakistani rupee in the open market.

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Background

In recent weeks, the Pakistani rupee has been under pressure due to:

Black market dollar hoarding

Smuggling of foreign currency

Artificial manipulation of rates in major cities like Karachi and Lahore

This created instability and widened the gap between the official and open market rates, threatening the country’s forex reserves and IMF benchmarks.

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ISI’s Intervention: A Turning Point

According to officials from the Exchange Companies Association of Pakistan (ECAP), ISI’s Deputy Director met with currency exchange owners to address illegal dollar trade and enforce stricter controls. Following this, targeted inspections and raids were launched in:

Karachi

Lahore

Islamabad

These actions forced illegal traders to halt operations and led to increased confidence in the open market.

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Market Impact

Date Open Market USD/PKR Rate Change

July 23, 2025 Rs. 296.00 ▼ Rs. 1.50

July 24, 2025 Rs. 295.00 ▼ Rs. 1.00

Total decrease in 2 days: Rs. 2.50

The rupee gained value as panic selling among black marketeers slowed down.

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Broader Implications

Stability in spot market: Demand and supply came into balance.

Investor confidence: Forex reserves are less strained.

Control over illegal networks: A major source of leakage was targeted.

However, the long-term impact depends on:

Strengthening official channels

Coordinated monetary and fiscal reforms

Sustained pressure against hoarders

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Key Insights

1. ISI’s role proves pivotal in stabilizing the exchange rate.

2. The crackdown indicates tight surveillance and a zero-tolerance approach to economic sabotage.

3. Continued vigilance is essential to avoid a rebound in illegal trading.