Smuggling re surging

Smuggling re surging may lead to impacting currency parity as the rupee paid in cash against snuggled product comes back to our exchange markets (mostly informal ones) for dollars, and it has to be exchanged at any price levels, which impact ls Open Market currency rates, followed by Remittances being affected as they get diverted towards informal channels (hundi hawala) for higher conversion rates.

Then banks have to increase the rates in pursuit of inflows through formal channels and it all starts impacting country’s macros, from rupee/$ to inflation, interest rates and investment, growth and so on!

Need an iron hand on smuggling for good!