President's Office alert to rising anxiety over inflation

She was replying to a motion submitted by MP Myint Kyi who called for an inflation stabilisation policy at the upper House session on June 19. 

“In its efforts to carry out people-centred development and nation-building, the government has to give priority to social benefits as well as profit-oriented businesses. As a result, it may face inflationary pressure. Social-welfare projects may lower the poverty rate and contribute to development, but all people face the problem of inflation to a certain degree. It is necessary to coordinate fiscal, monetary and trade policies to keep the inflation rate at a certain level,” Khin Saw Oo said.

To stabilise inflation, the central bank is working to effectively manage government expenditures with technical assistance from the World Bank. A bond market will be established to so that treasury notes can be bought through banks. To ensure price stability, the central bank will use indirect monetary policies, such as sales and purchases of treasury notes, disbursement of short-term loans and increasing deposits through the sale of government treasury notes. 

To curb inflation, the central bank will help draft a balanced state budget with approval from the Union government, and sell treasury bonds to the public to cover deficits. It will also control the amount of money circulating in the economy through indirect monetary policies such as raising or lowering the reserve ratio requirements of banks.