Dollar price to remain stable, says finance chief

The dollar price may remain stable due to the balance between supply and demand on the streets and official markets, according to Mya Than, chairman of Yangon Foreign Exchange Market Committee.

Some traders say the dollar price may go up due to the Central Bank of Myanmar’s (CBM) preparation for abolishing the interest rate, the plan to allow nine foreign banks to open and fixing the dollar price at international market rates. But the dollar may fall as a lot of dollars may flow into the country through foreign banks. The dollar’s volatility might depend on the CBM, he said.

“Broadly speaking, the CBM sells US$0.5-1 million per day via auction. Now the dollar is in high demand. Even the foreign exchange market is seeing more trading. This is due to more trade from private banks. The CBM’s reference rate per dollar stands at Ks1,025. The rate is very wide as buying and selling of dollars is within a 0.8 per cent bracket. On the street, the value of a dollar stood at Ks 1,030 yesterday. So dollar trading on the streets is within a 0.8 per cent bracket.

“Private banks can make interbank currency trading and buy dollars from the CBM. There is a balance between supply and demand. The dollar price will skyrocket on the informal market when demand is high. There will be a gap between the CBM and informal market prices when the dollar price is skyrocketing on the informal market. But now there is little difference between them,” he said.

As an apparent reform, the government gave autonomy to the central bank and adopted a floating rate for the kyat in 2012 with an exchange rate of Ks818. One year after this reform, the value of a dollar increased to Ks1,004 on the street market and Ks1,080 in late 2014. Currently, the CBM’s reference rate is Ks1,025 while the value of a dollar stands at around Ks1030 on the streets.

Source: ELEVEN

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