Unlicensed forex traders hauled in for questioning

Investigations are under way on several “Lay Patkar” traders, or unlicensed speculators dabbling in illegal trading of foreign exchange, a senior official from Yangon Police Force told The Myanmar Times.

After the dollar-to-kyat exchange rate hit a high of K1,642 in the local market on September 20, four dollar traders from Shwe Bon Thar Street were summoned for interrogations the following day by the Bureau of Special Investigation (BSI) under the Ministry of Home Affairs.

“Four speculators were interrogated and investigations are ongoing,” the BSI told The Myanmar Times.

At a September 21 press conference, U Zaw Htay, director general at the President Office, hinted that there may be investigations and action taken against those who trade foreign exchange illegally. The traders were summoned on the same day, during which the exchange rate also rose to K1,650.

On September 25, the kyat had dropped to K1,605 per dollar. So far though, no case has been filed against the four traders, according to a senior police officer from Yangon region.

The Central Bank of Myanmar (CBM) issues two types of licenses: the authorised dealer license and money changer license. Those who do not have licenses for foreign exchange dealing can be prosecuted for unlicensed dealing, said Daw May Toe Win, director general of the Foreign Currency Management Department at the CBM.

“Details of all license holders who deal in foreign currencies above US$10,000 have been submitted to the CBM in accordance with regulations. We can take action against those who have no licenses,” she said.

“Dealers who trade large amounts of forex can have an impact on the exchange rate and cause the value of the dollar to decline, a local importer explained.

Despite a slew of measures taken by the CBM, which included pumping millions of dollars from its reserves into the economy and a removal of the +/- 0.8pc exchange rate trading brand in August, the dollar has risen by around 10 percent against the Myanmar kyat since May.

That has affected businesses and households across the country, a major importer of goods like petrol, food, cosmetics, electronics and building materials. According to a recent survey by the Union of Myanmar Federation Chamber of Commerce and Industry, the key challenge for the economy in the second quarter was mainly volatile exchange rates.

SOURCE: MYANMAR TIMES

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