Strong dollar and grey market.

"The dollar is up 18% this year and last month hit a 20-year high, according to the benchmark ICE US Dollar Index, which measures the dollar against a basket of currencies." ET. Because, "To combat soaring US inflation, the Federal Reserve has raised its benchmark short-term interest rate five times this year and is signaling more hikes are likely." "Ordinarily, countries could get some benefit from falling currencies because it makes their products cheaper and more competitive overseas. But, the soaring dollar "is adding to global inflationary pressures at a time when prices were already soaring." "Around the world, countries that rely on food imports are grappling with a destructive combination of high interest rates, a soaring dollar and high commodity prices, eroding their power to pay for goods that are typically priced in the greenback." India's neighbor "Pakistan is facing a deflating economy, spiraling inflation, the rising arc of terrorism and a political system near paralysis." Dawn. "Pakistan's credit rating has been downgraded by Moody's with a blistering statement, saying the country's ability to afford its own debt is 'one of the weakest among the sovereigns' that the rating agency deals with." That will push up borrowing costs as lenders seek a risk premium. While the official exchange rate is 1 USD for 220.87 Pakistani rupees (PKR), xe.com, the dollar is changing hands for 232 PKR in the grey market. Dawn. "The widening gap between the open and interbank markets has also threatened remittances sent through banks by Pakistanis working abroad." If there is a wide gap in exchange rates between official and grey markets, expatriates, especially those with low incomes, may resort to 'hawala' transfers which is an informal method of transferring money without any physical records. Investopedia. "Hawala originated in South Asia during the 8th century and is used throughout the world today, particularly in the Islamic community, as an alternative means of conducting funds transfers." Since the funds cannot be traced terrorist groups use hawala "to move and distribute funds to their cadres and sympathisers across the globe". Quartz India. "For instance, in the July 2006 Mumbai train bombings carried out by the Indian Mujahideen (IM), the Pakistan-based handlers of the group used the hawala route to transfer money to IM cadres to execute the attack." "Pakistan is expected to finally exit the 'increased monitoring list' - commonly known as the grey list - of the Financial Action Task Force (FATF) on October 21, after languishing in the infamous category for almost 52 months." Dawn. It was in the FATF grey list because of "deficiencies in its legal, financial, regulatory, investigations, prosecution, judicial and non-government sector to fight money laundering and terror financing". Hunger, inflation and falling currency will make it easier for terrorist groups to recruit more cadre. Worrying for India.