A Myanmar Central Bank official said that the military-selected authorities in the country are initiating progress in alleviating its currency crisis, coupled with Myanmar Kyat stabilizing and ongoing exertions to regulate the volatile prices.
Myanmar Central Bank faces a currency crisis
In September 2021 the Myanmar Kyat lost over 60% of its value and drove the food and fuel princes to a surging level in an economy that has been fragile. The Myanmar economy has weakened ever since the February 1, 2021, military coup d’état and is estimated to see a double-digit shrinkage this year.
The Deputy Governor of the Myanmar Central Bank, Win Thaw, stated to Reuters that regulation required exporters to vend surplus foreign exchange to banks within 30 days of reception. This regulation was established to improve supply and fetch the exchange rate to a bare minimum.
Myanmar has not revealed its possession of foreign currency capitals. The data from the World Bank showcases that the country possessed only USD 7.67 billion in reserves at the dusk of 2020, before the coup d’état.
Surging prices of commodities have anciently been challenging for military governments in Myanmar. Even the monk-directed ‘Saffron Revolution’ of 2007 was triggered owing to the surge in prices of cooking gas.
The Myanmar military stated last week that its economic challenges were fueled by external factors and COVID19 mishaps.
Zaw Min Tun, the spokesman of the Myanmar military, stated that the Myanmar Central Bank was not capable of meeting the local demand for dollars.
Win Thaw was hopeful about an expected surge in the November-December exports to help uplift the prevalent currency crisis.
Win Thaw stated that the increase in export income would inhibit the growth of the dollar price. It would also facilitate a gradual trickle to its original rate.
The Myanmar Central Bank had tried anchoring the Myanmar Kyat at 0.8% on both sides of its reference rate against the dollar in August 2021. However, the Myanmar Central Bank rejected the measure owing to the surge in the exchange rate.
Currency exchanges cited around 1,695 Kyat to the dollar in the dawn of September 2021. However, the rate surged to 2,700 Kyat on September 28.
This week, sanctioned dealers have been vending dollars for 2,200 to 2,300 Kyat.