Kyat's downward momentum continues
The downward momentum of the kyat against US dollar continues, with the local currency being traded below 1,000 per US dollar for the first time since the managed float system was deployed in April 2012.
According to www.exchange-rate.org, the greenback first rose above Ks 1,000 on October 22. The Central Bank of Myanmar’s official rate for October 28 is at 1,004 per dollar. The kyat further weakened today to 1,006 per dollar.
The kyat averaged 935.81 from 2012 until 2014, reaching an all-time high of 989 in December of 2013 and a record low of 847.95 in October of 2012. The greenback’s upward momentum started in July when the US Federal Reserve hinted that interest rates could rise further than expected when they are eventually hiked, probably in mid-2015.
Economists have attributed the weakening to widening trade deficits, as Myanmar needs a huge amount of dollar for imports. Meanwhile, the greenback has gained against major currencies since July when the US Federal Reserve Board hinted at a possible hike in interest rates, following gradual economic recovery.
The kyat weakened against dollar along with other currencies since then and the pace has quickened since late September.
The kyat has also weakened against euro and Singapore dollar, falling to 1,277 per euro and 791 per Singapore dollar as of October 27.
