State Counsellor to meet economists to discuss sharp upturn in dollar prices

Nay Rai and Aung Min Thein

State Counsellor Aung San Suu Kyi is planning to meet professionals and experts from the economic field this month to hold discussion over relatively high dollar prices, said Zaw Htay, spokesperson to the President Office, on the sidelines of a press conference of Rakhine State Independent Investigation Commission on August 16.

"The State Cousellor, president of the Central Bank of Myanmar (CBM) and officials from economics-related ministries are always discussing the issue. Later this month also, the State Counsellor is due to meet people from the economic field. What I mean is that the government is taking charge of policy making while entrepreneurs are responsible for economic transactions. Meanwhile, we are receiving suggestions from economic experts and businesspeople. The State Counsellor and the President and those responsible from the economic filed are doing their best and coordinating for the matter," said Zaw Htay.

"The main thing is how we will control our foreign reserve. We must consider the local supply and demand. How can we control this local market? For a million dollars a day, for example, we have to set fixed prices for buyers. The Central Bank is doing as much as it can to do ensure a balance. Now we have gone with free float and previously,it was a managed float system. People bought dollars for fear of higher prices. When greenbacks are collected, there is more demand in the market. But today, exchange rate has decreased a little. This morning, one dollar was worth K1,560, and now it has fallen by over K20," said the spokesperson.

He expressed his hope that amid significant changes, the dollar price would become stable soon.  

The value of a US dollar hits a record high of over K1,500 after the Central Bank announced their decision to remove the reference rate for currency exchange.

On August 13, the CBM issued an announcement that abolishes the currency exchange system with a variation of +/- 0.8 per cent of the reference rate fixed in November 2012. It will be applicable to all banks with Authorized Dealer License (A.D) and exchange counters with Money Changer License (M.C).  

In a bid to control the dollar appreciation in the market, the CBM is selling US$ 100,000 to local banks via the auction market every day. In addition, the CBM plans to loan dollars to private banks and sell dollars to importers.