Myanmar’s currency falls to all-time low against US dollar
Myanmar’s currency, the kyat, has fallen to a new all-time low against the US dollar this September amid growing concerns about the stability of a nation disrupted by civil unrest nearly eight months after the military staged a coup d’état which could trigger a full-blown civil war.
The value of the kyat stood at 1,755 to the US dollar on September 22 as per the official reference exchange rate published daily by the Central Bank of Myanmar, a new all-time low.
The value of the currency has been dropping significantly since early September as the political turmoil prompted by the coup intensified and money supply of hard currency, including the US dollar, has been drying up.
On the black market, the kyat is currently traded at 2,200 to the US dollar, according to observers on the ground, also a new high.
Kyat’s collapse: From 818 to 2,200 to the US dollar
In comparison, the kyat stood at 1,331 at the latest trading day ahead of the February 1 coup. And is has lost even more significantly in value since the currency was floated in April 2012 at a set rate of 818 kyat to the US dollar.
The direct cause of the latest slide was a decision by the central bank to scrap a rule by September 10 that had kept the kyat-dollar exchange rate within 0.8 per cent of the reference rate, without explaining the change.
With the regulation eliminated, the official rate offered by banks and money changers is expected to soon converge with that of the black market, more closely reflecting a “true” market rate for the currency, observers say.
At the same time, the cost of basic goods has skyrocketed amid the nationwide turmoil and many money changers closed their shops, forcing those who need foreign currency onto the black market which is expected to drive the kyat rate even higher.
Prices for essential food doubling
Residents are already reporting that prices for food and daily necessities were “out of control,” with prices for condensed milk, cooking oil and rice having doubled at a time when many people have lost their jobs due to the double crisis caused by coup and Covid-19.
The depreciation of the kyat and soaring demand for US dollars follows a World Bank report released at the end of July which said that the twin impacts of the military takeover and coronavirus pandemic could double the poverty rate in Myanmar and suggested the economy was headed for a severe recession of an up to a 18-per cent contraction this year.
Myanmar’s currency, the kyat, has fallen to a new all-time low against the US dollar this September amid growing concerns about the stability of a nation disrupted by civil unrest nearly eight months after the military staged a coup d’état which could trigger a full-blown civil war. The value of the kyat stood at 1,755 to the US dollar on September 22 as per the official reference exchange rate published daily by the Central Bank of Myanmar, a new all-time low. The value of the currency has been dropping significantly since early September as the political turmoil prompted by the...
Myanmar’s currency, the kyat, has fallen to a new all-time low against the US dollar this September amid growing concerns about the stability of a nation disrupted by civil unrest nearly eight months after the military staged a coup d’état which could trigger a full-blown civil war.
The value of the kyat stood at 1,755 to the US dollar on September 22 as per the official reference exchange rate published daily by the Central Bank of Myanmar, a new all-time low.
The value of the currency has been dropping significantly since early September as the political turmoil prompted by the coup intensified and money supply of hard currency, including the US dollar, has been drying up.
On the black market, the kyat is currently traded at 2,200 to the US dollar, according to observers on the ground, also a new high.
Kyat’s collapse: From 818 to 2,200 to the US dollar
In comparison, the kyat stood at 1,331 at the latest trading day ahead of the February 1 coup. And is has lost even more significantly in value since the currency was floated in April 2012 at a set rate of 818 kyat to the US dollar.
The direct cause of the latest slide was a decision by the central bank to scrap a rule by September 10 that had kept the kyat-dollar exchange rate within 0.8 per cent of the reference rate, without explaining the change.
With the regulation eliminated, the official rate offered by banks and money changers is expected to soon converge with that of the black market, more closely reflecting a “true” market rate for the currency, observers say.
At the same time, the cost of basic goods has skyrocketed amid the nationwide turmoil and many money changers closed their shops, forcing those who need foreign currency onto the black market which is expected to drive the kyat rate even higher.
Prices for essential food doubling
Residents are already reporting that prices for food and daily necessities were “out of control,” with prices for condensed milk, cooking oil and rice having doubled at a time when many people have lost their jobs due to the double crisis caused by coup and Covid-19.
The depreciation of the kyat and soaring demand for US dollars follows a World Bank report released at the end of July which said that the twin impacts of the military takeover and coronavirus pandemic could double the poverty rate in Myanmar and suggested the economy was headed for a severe recession of an up to a 18-per cent contraction this year.
