Reference exchange rate change from 1,850 to 2,100 kyat per dollar as Myanmar currency value declines sharply
Last week, the Central Bank of Myanmar (CBM) changed the foreign currency reference exchange rate from 1,850 to 2,100 kyats per dollar as the national currency continues to weaken.
The Myanmar kyat value is declining rapidly these days with around Ks2,600 against one dollar on August 6. Meanwhile, exchange rates of other foreign currencies were Ks2,560 per euro, Ks1,950 per Singapore dollar, Ks600 per Malaysian ringgit, Ks75 per Thai baht, Ks18 per Japanese yen and Ks370 per Chinese Yuan, according to local foreign currency exchange dealers.
CBM also issued a notification dated August 5 that requires exporters to convert only 65 percent of their export earnings to Myanmar kyats.
This was in line with the CBM issuance of Notification No.12/2022 on April 3, 2022 regarding foreign exchange earnings of locals and transferring of foreign currency abroad.
It is stated that this notification shall take effect from the date of issue and any failure to comply with this notification shall result in legal action under the Foreign Exchange Management Law.
Currently, there are few reports of dollar exchange at the official exchange counters with the exchange rates approved by CBM.
“We are now going in the way we sell or buy as we like. The exchange counters usually buy dollars at the exchange rates set by CBM but do not sell back. So we can say that buying and selling have stopped at those official exchange counters,” said a local currency exchange dealer.
Some online shops suspending their sales
With Myanmar currency depreciation, some online shops selling consumer products and foods imported from Thailand have suspended their sales. They are facing difficulties as the kyat value against Thai baht is instable.
“I have stopped selling anything. Most of my products are coming from Thailand. The Myanmar currency value is declining continuously. For example, if it is Ks70 per baht in the morning, it will be Ks75 per baht in the evening. We receive pre-orders. In a case, we calculated Ks62 or 63 per baht. But when goods arrived, the value increased to Ks70 or 75. When we buy goods, we have to pay in advance. But sometimes, we have to pay upon arrival of cargoes. Now we are facing difficulty doing business. We don’t know what to do with this instability of our currency,” said a local shopkeeper selling goods online.
Online shopping facing worst situation due to instable Myanmar currency
“Ours is an online shopping business selling clothing imported from Thailand both retail and wholesale. There are fewer customers because an item of clothing previously worth about Ks6,000 has to be sold for about Ks7,000 or Ks8,000 now. Our sale has declined. Prices are not increasing in Thailand. But we have to buy clothes in baht and sell them in kyats. The problem is that kyat value is decreasing hour by hour in our country. Moreover, delivery charges are increasing in parallel with others. We are now in the worst situation. If the situation goes on like this, we have to do another kind of business,” said an online shop owner.
Currently, most of online shops have suspended their sales as demand decreases significantly.
Likewise, the majority of Myanmar people are facing commodity price hikes, forcing themselves to buy essential things only.
“As the price of everything gets high in Myanmar, the people have to buy only essential things such as food. But this may be different for the rich. Ordinary people bear the brunt of skyrocketing prices. They cannot imagine extra expenses. Previously, we bought food such as rice and cooking oil for a month. Now we buy only for a week or two. We buy less quality rice. We need to save in all aspects,” said a housewife in Sangyoung Township, Yangon.
Some comment that if the Myanmar kyat depreciation continues to worsen, it will have great impact on people from all walks of life.
