What is this Myth of Sending money in Dollar vs Rupee?

[AZADPAKISTAN2009]

What is this Myth of Sending money in Dollar vs Rupee? to Pakistan.

I have heard many folks claim when you send case thru small money exchangers your cash is converted to Rupee and that is transferred and not actual Dollar currency

I have heard many people claim that if you send money to Pakistan send it as a Dollar currency so it builds the Dollar reserve in Pakistan vs Pakistani Rupee

Any good articles to read about this analysis Dollar vs Rupee?

What prevents Pakistan to not maintain it's currency reserves in a particular currency ?

Is it tied to Trade deficit ?

US routinely minipulates the world markets , for it's paper asset "Dollar" printer paper
and Oil

 

[Sugarcane]

It's simple, If receiver is getting same currency you sent then money will actually come to Pakistan and will be in records of remittances of government. Otherwise it's Hundi/Hawala where 99% of time forex is not actually remitted.

 

[Samlee]

What is this Myth of Sending money in Dollar vs Rupee? to Pakistan.

I have heard many folks claim when you send case thru small money exchangers your cash is converted to Rupee and that is transferred and not actual Dollar currency

I have heard many people claim that if you send money to Pakistan send it as a Dollar currency so it builds the Dollar reserve in Pakistan vs Pakistani Rupee

Any good articles to read about this analysis Dollar vs Rupee?

What prevents Pakistan to not maintain it's currency reserves in a particular currency ?

Is it tied to Trade deficit ?

US routinely minipulates the world markets , for it's paper asset "Dollar" printer paper
and Oil

It's Called Hundi Our Inflows From Remittances Would Double If We Get Rid Of This

 

[AZADPAKISTAN2009]

Why not just replace all bills with new bills Force all hidden currency holders to come out of their caves

 

[CriticalThought]

Question: Is Western Union also classified as Hundi/Hawala?

 

[AZADPAKISTAN2009]

Well seems like this is fixable issue

 

[Zhukov]

I don't know what you are talking about, But other then the formal way of transferring money from one country to another their is hundi system. that i may be able to explain.
See If a person wants to send dollars from USA to Pakistan, He will give say 100 dollars to hundi broker in USA. That Hundi Broker in USA will direct a Hundi Broker in Pakistan to pay the equivalent amount of Rupees to the person requested by the Money sender. So Pakistani Received the money from a Pakistani Hundi Broker and American gave the money to an American Hundi Broker. So no Dolalrs moved to Pakistan foreign exchange Reserves.
Now the point is how the liabilities are settled between the hundi brokers? i mean Now the Hundi Broker of USA have a liability to pay to Hundi Broker of Pakistan right? Pakistani broker paid an amount on his behalf?
Answer is complex, their are many ways.
The most Prevalent is Money Laundering.
When other Pakistanis having Black Money want to transfer money to foreign countries by same Hundi channels They will give their Rupees to Pakistani Hundi Brokers And Pakistani Hundi Broker will direct the American Hundi Broker to pay equivalent amount of Dollars to be paid to an American requested by the sending Pakistani.
Although its not that simple there are many modes of transactions with many currencies and countries involved.
Hope i have explained it in easiest words possible.
Problem is Formal banking channels are too expensive and formal that when people have to send small amounts of money they find it more convenient to use Hawala/Hundi Systems. Its responsibility of the State bank to make regulations to make formal banking channels more accessible and cost effective.

 

[Abdussamad]

They are talking about hundi/hawal which is a centuries old money transfer system outside government control. It's still transferring money to Pakistan but because it is outside government control it gets a bad rep in the media.

If you were using hundi/hawala you would know it because it's based entirely on trust. Transferring money via exchange companies or banks is not hundi/hawala.

 

[CriticalThought]

Question: Is Western Union also classified as Hundi/Hawala?

I haven't received a clear cut, straight answer to my question yet.

 

[rizhussain44]

I send money from US to Pak through Xoom. They charge just $5 per transaction for amounts less than $1000 and for $1000 or more they apprently do not charge any fee. I believe they make money while doing conversion for such transaction. My question is, does sending money like this through xoom help in building Pakistan foreign currency reserves?

 

[Complex Variable]

Question: Is Western Union also classified as Hundi/Hawala?

I also have the same question about Western Union, Ria Money exchange.

Both give multiple options to send money to Pakistan. Transfer in bank account, or directly send to a person who can receive it from UBL or Allied bank in Pakistan by showing the ID Card.

 

[Yaseen1]

I send money from US to Pak through Xoom. They charge just $5 per transaction for amounts less than $1000 and for $1000 or more they apprently do not charge any fee. I believe they make money while doing conversion for such transaction. My question is, does sending money like this through xoom help in building Pakistan foreign currency reserves?

if such transaction occur through state bank then it will increase reserves as state bank will pay equivalent amount in rupees by printing new equaivalent rupees notes to receiver of your money and keep dollar or other foreign currency but if through private money changers then it may be suspectable to money laundering

 

[Abdussamad]

I haven't received a clear cut, straight answer to my question yet.

I also have the same question about Western Union, Ria Money exchange.

Both give multiple options to send money to Pakistan. Transfer in bank account, or directly send to a person who can receive it from UBL or Allied bank in Pakistan by showing the ID Card.

Non of these are hundi/hawala. I've explained it quite clearly in my post above. I guess no one bothers to read what's written here on this forum. I'm quoting the relevant part below to make it easy for you ADHD sufferers:

If you were using hundi/hawala you would know it because it's based entirely on trust. Transferring money via exchange companies or banks is not hundi/hawala.

if such transaction occur through state bank then it will increase reserves as state bank will pay equivalent amount in rupees by printing new equaivalent rupees notes to receiver of your money and keep dollar or other foreign currency but if through private money changers then it may be suspectable to money laundering

This is just plain wrong. It's got nothing to do with state bank or private money changers. The state bank of Pakistan is not a commercial bank and does not offer its services to the general public in any country. It's the central bank of the country and only offers its services to the government and commercial banks.

Private exchange companies don't use hundi/hawala. They send money through regulated channels.

xoom is a legal service as well.

 

[Yaseen1]

private exchange company sometimes do hundi hawala under cover of their license.If govt want to reduce dollar outflow it should encourage people to remit foreign currency through govt controlled banks as they are easy to regulate and monitor

Non of these are hundi/hawala. I've explained it quite clearly in my post above. I guess no one bothers to read what's written here on this forum. I'm quoting the relevant part below to make it easy for you ADHD sufferers:





This is just plain wrong. It's got nothing to do with state bank or private money changers. The state bank of Pakistan is not a commercial bank and does not offer its services to the general public in any country. It's the central bank of the country and only offers its services to the government and commercial banks.

Private exchange companies don't use hundi/hawala. They send money through regulated channels.

xoom is a legal service as well.

 

[zip]

I don't know what you are talking about, But other then the formal way of transferring money from one country to another their is hundi system. that i may be able to explain.
See If a person wants to send dollars from USA to Pakistan, He will give say 100 dollars to hundi broker in USA. That Hundi Broker in USA will direct a Hundi Broker in Pakistan to pay the equivalent amount of Rupees to the person requested by the Money sender. So Pakistani Received the money from a Pakistani Hundi Broker and American gave the money to an American Hundi Broker. So no Dolalrs moved to Pakistan foreign exchange Reserves.
Now the point is how the liabilities are settled between the hundi brokers? i mean Now the Hundi Broker of USA have a liability to pay to Hundi Broker of Pakistan right? Pakistani broker paid an amount on his behalf?
Answer is complex, their are many ways.
The most Prevalent is Money Laundering.
When other Pakistanis having Black Money want to transfer money to foreign countries by same Hundi channels They will give their Rupees to Pakistani Hundi Brokers And Pakistani Hundi Broker will direct the American Hundi Broker to pay equivalent amount of Dollars to be paid to an American requested by the sending Pakistani.
Although its not that simple there are many modes of transactions with many currencies and countries involved.
Hope i have explained it in easiest words possible.
Problem is Formal banking channels are too expensive and formal that when people have to send small amounts of money they find it more convenient to use Hawala/Hundi Systems. Its responsibility of the State bank to make regulations to make formal banking channels more accessible and cost effective.

What will be the net effect on forex reserves in above case ?