Forgot your password?
India's neighbours struggle after shock currency move
India's neighbours struggle after shock currency move
BBC NEWS From the section Asia
November 25, 2016
The currency move has caused chaos not just for Indians but also for many nationals in neighboring countries
India's surprise move to get scrap 500 and 1,000 rupee notes to target hidden stashes of "black money" has affected the country's immediate neighbors, which all have long-standing trade, tourism and family links.
We look at the myriad ways in which different countries are affected.
Bangladesh
Moneychangers in Bangladesh have refused to take the notes.
More than one million Bangladeshis visit India every year for medical, tourism and business purposes.
Many Bangladeshis, especially businessmen, visit as often as two or three times a month. Being businessmen, they tend to carry wads of high-value Indian notes on their trips.
Since the new rules have come into effect, Bangladeshis have been trying to exchange their unusable currency, but moneychangers have refused to take them.
There is a lot of informal trade in goods between Bangladeshi and Indian businesspeople, and they exchange money at the border without bothering with documentation.
"So they have to keep cash all the time. [But] now they can't exchange those notes," said Abul Hossain, a businessman from Jessore, near the border.
The difficulties cut both ways, with many Indians living in Bangladesh are also facing problems.
One student, Maria, said she was struggling to change Indian rupees sent by her father through informal channels - meaning she has no documentation. "The total amount is 50,000 rupees, and all are high-value notes. But I can't exchange those," she says.
Shopkeeper Raghunath Prasad Sah is one of those who rely on cross-border trade.
Farmers in eastern Nepal say the volume of their agricultural exports to India have decreased by almost 90% since the Indian currency move.
The unsold products are being dumped in warehouses and even along main roads.
About 98% of cardamom and more than 70% of tea and ginger produced in Nepal are bought by Indian businessmen from across the border.
In southern Nepal, along the long land border with India, businessmen have also expressed concern about the Indian government's move.
It is common for most businesspeople, and even households to keep Indian currency for cross-border trade and business.
"I normally go to Raxaul Bazar, a shopping town across the border in India. I take 500 and 1,000 Rupee notes to buy supplies, but most people aren't accepting them and those that do are deducting 20% of the value for exchange. " Raghunath Prasad Sah, a shop owner in Birgunj, told the BBC.
Pakistan
In Pakistan, currency dealers are estimated to hold more than 150 million rupees ($2.2m) worth of Indian currency. After the government's move on the 500 and 1,000 rupee notes, this stash is being traded for about a quarter of its value, they say.
The general secretary of the Pakistan Exchange Companies Association says Pakistani citizens hold Indian currency - sometimes in large amounts - because they travel there for family reasons.
"Not enough time was given to people outside India to exchange money," Zafar Paracha said. "It was very sudden."
Pakistan has also denied that counterfeit Indian currency is being produced in Karachi and Peshawar. Targeting counterfeit cash is thought to be another reason for India's unexpected move.
Sri Lanka
Sri Lankans living in India says they are facing serious difficulties as a result of the sudden decision by the Indian government.
A PhD student who declined to give her name said the announcement came while she was visiting Sri Lanka on holiday. "When I came to Sri Lanka, I brought some Indian rupees with me. As I have an Indian visa for valid for 4 years, I was not shocked as I thought I would be able to go to State Bank of India in Colombo with my 500 rupee notes," she said.
"But they were quite rude and told me only dollar notes could be exchanged outside India. They also refused to offer me any advice."
Sri Lankan diplomats have also told BBC Sinhala that the cash crisis has left hundreds of Buddhist pilgrims stranded in India. Without access to cash, they are finding it difficult to continue their journeys or return home, the diplomat said.
Poor families normally take part in these pilgrimages, sometimes even pawning their jewelry or other valuables to make the trip.
Reporting by BBC Bengali, BBC Nepali, BBC Sinhala and BBC Urdu
http://www.bbc.com/news/world-asia-37990283
