RE:“Public agencies join hands to fight illegal forex market” (The New Times, October 4). If indeed there is no shortage of forex in the market then supply outweighs demand. In such cases, the black market will disappear. But, as long as these black market operators are still around, they are reason to suspect that demand still outweighs supply, and in that case the problem may be how forex prices are set.
If prices are set below the equilibrium, the resultant excess demand causes the growing black market operators in the forex business. However, if demand and supply freely set the prices, then the issue of black market operators is history.
Black market operators are usually smart people to such an extent that using the new body may disrupt the market negatively and the results may not be desirable.
How should we fight the vice? Let us examine the process and mechanisms of forex pricing, let’s revisit the regulation and close loopholes (if any), otherwise we may be fighting a battle we will never win. Black markets have been in existence since the biblical days and can be best addressed through regulation.