CBM unveils plan to facilitate foreign currency trading in foreign exchange market as needed

Published 7 March 2024

EMG

The CBM will trade US dollars, Thai Baht and Chinese Yuan as needed in the foreign currency market to narrow the exchange rate gap and to control the rise and fall of the exchange rate, announced the Central Bank of Myanmar (CBM).

The CBM established the foreign currency market in March 2013, and since the CBM has provided support for the development of the foreign currency market, the volume of sales in the foreign currency market has gradually increased from 2014.

There are two parts to the foreign exchange market: inter-bank trading and bank-to-customer trading. AD licensed banks send the trading volume in the foreign currency market to the CBM four times a day through electronic reporting systems - ERS. The CBM is also announcing the status of sales in the foreign currency market to the public on its website.

The Marketing Trading Rate is controlled by the CBM to stay within the appropriate exchange rate range using the trade conditions of foreign trading partner countries that affect the foreign currency exchange rate, export and import status, macroeconomic variables such as domestic spending, income and outflow from trade, inflow and outflow from non-trading sectors, budget deficit and the total amount of funds. Foreign exchange rates are determined by speculators for their own benefit, and sometimes rumors cause higher than expected exchange rates and higher and lower rates due to increased demand for foreign currency.

The CBM is selling the Managed Floating Exchange Rate Regime, a market-based exchange rate system, in online trading to facilitate the entry of more exports and investments to make it more profitable for those with foreign income, including exporters, to contribute to the country's economic growth.

The implementation of such a regulated exchange rate system is a system that is regulated as necessary so as not to increase and decrease the change in the exchange rate to narrow the gap between the exchange rates.

In order to manage that, the CBM has announced on March 5, 2024 that it will intervene in the foreign exchange market with foreign currencies such as US dollars, Thai Baht and Chinese Yuan as necessary.