Myanmar Kyat drops 10 % in two months

The Kyat depreciated from 812 to 900 per US dollar, or some 10 percent fall in two months.

Speaking to a CMP forum on development and challenges that took place at Chatrium Hotel in Yangon on June 3, Union Minister for Industry U Soe Thein mentioned he deplored the Kyat value and added that there were some plans to bring it down.

“I’m not in favour of the Kyat being strong. We’ve got a plan. I can let you know that we’re planning to somewhat decrease the exchange rate,” the minister was quoted in local news journals.

Three weeks later, the Myanmar currency fell, reaching 900 kyats a dollar in black market. The incident was followed by the circulation of 10,000-kyat banknotes.

In April, the Kyat stood at 812 in exchange against the dollar and rose to 819 at most. In May, the exchange rate between the Kyat and the dollar was somewhere between 817 and 840, following a steady rise in June. On 27 June, the rate was at about 900 kyats per dollar.

There was a slight decline in the exchange rate of the Myanmar currency between April and May, and the gap became wider in June.

The depreciation in foreign exchange rates was a positive sign for exporters, said Daw Hla Myint, former professor at Management Department, Yangon Institute of Economics. “If farmers had nothing in stock by now, they would have small immediate returns. But once the volume of exports becomes high, it is encouraging,” she said.

“I think the government is behind the present rise in exchange rates. More business means more money circulation. The exchange rate should be stable enough to keep businesses thriving. The important thing is to make an effort to stabilize the rate,” she said.

Care should be taken not to let the inflation rate get higher than it should. The present situation will give rise to more exports, which will in turn increase imports. A rise in trade and investment will surely wake up the economy of Myanmar”, said the economist Daw Hla Myint.