Yangon, July (25)
The circulation of new K 20,000 banknotes by the military council could lead to higher inflation and unemployment, while the public could suffer further from skyrocketing commodity prices, said the economic experts.
The military council announced on July 23 that a new 20,000-kyat banknotes will be issued to commemorate the completion of the Vijayabhumi Nimmana Buddha image and the one-year anniversary of the white elephant Rattha Nandaka, who was found on July 23 last year.
The revelation of new 20,000 kyat notes shocked the local market, and most product prices jumped on July 24.
An economist told Than Lwin Times, “the circulation of new 20,000 kyat banknotes could have a lot of impact on the market, leading to an increase in inflation and unemployment. The military regime has issued new banknotes as a commemoration, but at this time they should not do anything that will cause chaos in the market”.
In addition, according to the monetary policy, new currency can be issued when the country’s GDP grows, but experts say that the issuance of new 20,000-kyat notes at a time when the GDP is falling could have a major impact on Myanmar’s economy.
The junta-controlled Central Bank said the 20,000-kyat banknotes will be issued in a limited number, and various types of old banknotes that should not be appropriate for circulation in Myanmar will be exchanged for equal value.
A businessman also told Than Lwin Times that the circulation of new currency will have a ripple effect on the market, raising commodity prices again.
The Central Bank has publicly stated that it is collaborating with law enforcement to take action against individuals who contribute to rising commodity prices and those who are attempting to encourage foreign exchange rates over the issuance of new currency notes.
The 20,000 kyat currency will be released in limited numbers beginning July 31, but the military council has not stated how much of it will be circulated, fueling fears that it may cause inflation.
The World Bank announced in the last week of June that Myanmar’s deteriorating economic situation after the military coup has not yet recovered and that repeated wrong policies will irreversibly harm the country’s economy.
News – Than Lwin Times