The Central Bank of Myanmar has strengthened the official kyat-US dollar exchange rate for the first time this year, after the local currency had steadily lost value in 2015.
Money changers said their rates were close to the Central Bank’s, in contrast to most of the year when there were some gaps as high as 15pc between the official and the market rate.
“The Central Bank’s rate decreased slightly on July 27, and our rates also decreased,” said an official from Tharawun Money Changer.
The official reference rate for the kyat was moved to K1238 on July 28, from K1240 per dollar on July 27.
The move bucks a year-long trend of the kyat losing value against the dollar. The kyat started the year at K1025 to the dollar, meaning it has weakened by 20.7 percent in the year to date.
For much of 2015, the Central Bank’s rate and the market rate diverged significantly, as the Central Bank dragged its heels on following the depreciation in the market. Many money changers closed up shop or hid their rates, while importers had trouble obtaining the dollars they needed to buy goods.
The Central Bank’s decision on July 13 to take a more market-oriented stance drew widespread support from the business community and money changers. It has also announced plans to mop up excess liquidity through deposit auctions and sale of treasury bonds.
The Tharawun official said that while the exchange rate has been changing frequently, yesterday the market and official rate were broadly in line.
However, not all money changers said they are back in business just yet.
An employee at True-M money changer said the counter has been closed recently due to a shortage of business. Yesterday, it was buying dollars at K1235, slightly below the Central Bank’s official rate.
Movements in the exchange rate are closely watched. Several Facebook groups have active discussions on what will happen from day to day, though often the posted forecasts are short on analysis and long on hunches.
Other moneylenders told The Myanmar Times they were unaware the Central Bank’s rates had changed.
“We didn’t know the official rate fell K2,” said an employee at Swan Htet Yee money changers.
Source: Myanmar Times