Ministry of Commerce had started suspending the issuance of re-export licenses for sugar and fuel oil after the greenback appreciation on August 17.
Yan Naing Tun, Director-General of Trade Department at the Commerce Ministry said: “The ministry has suspended the issuance of new re-export licenses as there is widespread criticism that the unstable currency exchange rate is linked to the re-export of sugar and diesel. But the licensed re-export process will run as usual.”
Since August, 2015, Myanmar has introduced the issuance of re-export licenses. The ministry has allowed re-exports of sugar, betel nut, sesame and cotton.
An official from Myanmar Fuel Oil Importers and Distributors Association said: “I think the move aims to control the huge outflow of foreign currency. The authorities need to thoroughly scrutinize whether the currency depreciation against US dollar is linked to this matter at all”.
During two and half months of this fiscal year, the imports of fuel oil has increased by more than 90,000 tonnes worth over US$ 255.780 million compared with the same period last year, according to the Commerce Ministry,
Until June 15, 2018, the country imported 420,798.608 tonnes of gas-o-line worth US$ 294.307 million. In the same period Last year, the country imported 396,062 tonnes of gas-o-line worth 218.689 million, according to the Commerce Ministry.
Till June 15, the country imported US$ 490.920 million worth of diesel. In the same period last year, diesel imports amounted to US$ 335.963 million.
On August 17, the value of a US dollar hit Ks-1,530 and the US dollar index was above 96 point. On August 16, the value of a US dollar hit a record high of Ks-1,560.
On August 13, the Central Bank of Myanmar (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.
Following widespread criticism from the public, the Special Economic Advisor Dr. Sean Turnell wrote on his Facebook page that the current instability of currency exchange rates was an event which features many international factors and reasons, of which it included the sugar and fuel oil re-export to China as a contributing factor.
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 August 16.
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.