Weak currency prompts Myawaddy border trade businesses to halt operation
Border trade in Myawady, Kaying State, is being impacted greatly by the weakening Myanmar currency against the US dollar and Thai baht, forcing some border trade activities to stop, according to local merchants.
A merchant said he was making losses from importing Thai goods due to a difference between the dollar exchange rate set by the Central Bank of Myanmar and the actual market price, and the increasing baht value against the Myanmar kyat.
An entrepreneur engaging in border trade said: “Our company has stopped doing business. We had to buy and deposit dollars into the Myanmar bank for the value of goods exported to Thailand. But the bank paid back in Myanmar currency so we made losses. Most of businesses have stopped their operation. Some companies that could not deposit dollars also faced closures. Trade has been declining gradually in both export and import activities.”
Both Myanmar kyat and Thai baht are used in trade activities in the border town of Myawady. When goods are purchased from Thailand, Myanmar kyats can be paid but that must be the same value as baht. Now, 1,400 baht is equivalent to about 100,000 kyats. Last month, 100,000 kyats had to be paid for an item of goods worth 17,000 baht. But this month, it was Ks121,500.
Myanmar has been allowed to export maize to Thailand without a tariff from February 1 to August 31 this year. Some businesspeople have reportedly stopped exporting maize. In the process, the exporters had to sell their products to Thailand for baht, deposit dollars to the Myanmar bank and withdraw Myanmar kyats.
A local merchant said a friend of his made a loss of over Ks100 million from exporting 20 truckloads of maize.
According to the data from the Ministry of Commerce, border trade at the Myawady border trade zone had declined from April to July this fiscal although it used to have trade most with Thailand compared to other border trade zones on the border.
Myawady border trade zone exported agricultural products worth US$319.403 million from April 1 to July 29, with a decline of US$71.067 million compared to the same period of last fiscal.
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