The Central Bank of Myanmar (CBM) has announced that US$6 million was sold at an auction exchange rate of Ks1,650.6 per US dollar on May 12.
According to monthly purchases and sales of US dollars from January to December in 2020, the CBM purchased US$39.5 million in January, US$31.5 million in February, US$21 million in March, US$16.7 million in May, US$39.1 million in June, US$31.1 million in July, US$35.6 million in August, US$44.2 million in September, US$43 million in October, US$100,000 in November and US$7.8 million in December. It then sold US$2.7 million in April and US$3 million in December. Moreover, US$1.8 million was purchased in January this year.
The CBM is conducting an auction for foreign exchange with the aim of reducing the fluctuation of foreign exchange rates in a short-term period and fulfilling needs of foreign exchange reserves.
To implement these aims, the CBM is engaging in foreign exchange auctions, which is a basic rule of foreign exchange operation.
Rules and directives have been adopted for such auctions. And the CBM is trading in foreign exchange with three State-owned banks, 19 local private banks and 13 foreign bank branches holding authorized dealer-AD licenses.
In order to reduce sudden fluctuation of foreign exchange rates, the CBM engages in comparing daily reference exchange rate of Myanmar kyat per US dollar, conducting foreign exchange auctions to sell US dollars if MMK value decline goes beyond the prescribed rule, conducting foreign exchange auctions to purchase US dollars if MMK value increase goes beyond the prescribed rule, comparing average exchange rate of MMK per US dollar over the past 20 days and conducting auctions to purchase US dollars if the MMK value increase rate goes beyond the prescribed rule and purchasing and selling US dollars with use of a real time dealing platform of Thomson Reuters by following suggestions from AD banks about foreign exchange purchases between the highest and lowest rates announced by the CBM.
The CBM has warned that its foreign exchange auctions are not operating to keep foreign exchange rate at a fixed one or to increase or decrease MMK value.
