CBM’s loan disbursement to private banks would result in inflation: JPCA

Writer: 
Phyo Wai
A private bank in Yangon.

 

In 2016-2017 fiscal year, the Central Bank of Myanmar (CBM) loaned over Ks-693 billion to seven private banks at the request of local banks. This may increase the amounts of revolving money and lead to inflation, the Joint Public Account Committee (JPAC) suggests.

In 2016-2017 fiscal year, the CBM granted temporary loans to seven private banks with the term not exceeding 92 days. The CBM calculated the daily interest rate with a 10-per-cent interest.

Union Auditor-General Maw Than said the disbursement of temporary loans to private banks can help support the circulation of money.

Ayeyarwady Bank stood first with a loan of Ks-225 billion, Myanmar Apex Bank, second, with over Ks-179 billion and Kanbawza Bank, third with Ks-130 billion.

Granting temporary loans to private banks can help smooth the circulation of money in private banks and the CBM get interest incomes, the Joint Public Account Committee has warned.

Kyaw Kyaw Maung, the Governor of the CBM said at a press conference on the government’s two years in office: “The central bank hit its goal of reaching the total currency amount and reserve money. The inflation rate was 9.99 per cent in 2015-2016 FY. It dropped from 6.81 per cent in 2016-2017 FY to 4.61 per cent in December, 2017."