Irrawaddy-June 1
As Myanmar’s currency collapsed against the dollar following the 2021 coup, the military regime imposed import-export restrictions and a fixed exchange rate in a bid to control foreign currency flows. But its efforts to prop up the currency have failed, as the kyat continues to plummet. The junta-controlled Central Bank of Myanmar (CBM) set an official exchange rate of 2,100 kyats per dollar in August last year. The rate offered in the market and private banks then stabilized for several months at 2,800 kyats/dollar. But in the third week of May, the kyat fell in the market to 3,000 per dollar. The CBM blamed currency manipulation and rumors, and warned of legal action. Private banks found to be involved in currency manipulation would be punished too, it said. Meanwhile, it announced plans to sell dollars to private banks. The CBM stopped selling dollars in March 2022, by which time it had sold more than $ 530 million under junta rule.
Currently, the CBM does not supply enough dollars to businesses that need the greenback, businesspeople told The Irrawaddy. “The CBM’s talk about dollars is empty. Dollars sold by the central bank never actually reach businesspeople. Only a handful of people get most of the dollars sold by the CBM. Businesspeople don’t want to take risks when there is no profit, so many operators are just maintaining their existing businesses with a wait-and-see attitude,” an exporter told The Irrawaddy. Myanmar is facing a foreign currency crisis because the junta’s CBM is restricting, not regulating, the money market, US-based Myanmar economist U Sein Htay told The Irrawaddy. Read more at:
