Nay Pyi Taw, 7 December
Myanmar junta’s central bank, which controls the domestic foreign currency market, announced on December 5 that foreign currency can be freely traded at the exchange rate of the external market.
According to the announcement, the junta-controlled central bank will no longer set the exchange rate for foreign currency in the online trading system for authorized dealers (AD), which buy and sell foreign currencies.
According to the central bank, those who want to sell and buy foreign currency in the online trading system of the foreign currency market can do so freely according to the exchange rate of their choice.
However, there is a restriction on the transfer of foreign currency purchased from the market, which must be done in accordance with the procedures set by the Foreign Exchange Supervisory Committee.
An economist told Than Lwin Times, “Allowing foreign currencies to be sold at the foreign exchange rate may be an attempt by the military council because of the increased demand for dollars, but it is too late and the public may be affected by high prices.”
An export/import businessman also said, “Because the military council no longer controls the foreign currency market, the exchange rates are chaotic, and the arrival of the former central bank’s clients in foreign markets increases the demand for dollars.”
After the announcement of the Central Bank, the exchange rate of dollar rose from around 3,450 kyats a few days ago to more than 3,500 kyats yesterday.
According to the businessmen, it is currently difficult to buy dollars in the market, and some banks have closed dollar transactions because it is difficult to set the exchange rate.
On the other hand, due to the need for dollars, the military council ordered to exchange 65 percent of the export earnings according to the exchange rate set by the central bank since last year and only 50 percent from July.
Economists believe that the Central Bank’s exchange rate of 2,100 kyats per dollar will reduce export activities while increasing demand for dollars.
According to the World Bank, Myanmar’s economy, which has been in crisis since the military coup, has yet to recover, and the wrong policies will cause the economy to decline again and again, permanently harming the country’s economy.
News-Than Lwin Times
Photo-CJ