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Businesses call for CBM intervention on exchange rate, virus

With the COVID-19 virus outbreak set to impact Myanmar’s economy and recent rapidly fluctuating foreign exchange rates, the Union Federation of Chamber of Commerce and Industry (UMFCCI) has requested the Central Bank of Myanmar (CBM) to intervene.

“COVID-19 will have impacts on Myanmar’s economy. At present, tourism has plummeted and regular exports of fruit to China have slowed to a trickle. From a global perspective, many foreign governments and central banks are instituting quick responses to recent situations. In Myanmar, another recent issue is the fluctuation of foreign exchange rates. The kyat has strengthened against the US dollar, making local products more expensive for foreign buyers” said UMFCCI Secretary-General U Aye Win on March. 5

“We can foresee how far they impact will reach – they may affect all local businesses including severe impacts on agriculture-related sectors,” U Aye Win added.

Since the majority of Myanmar’s exports are agricultural products, the sector may face hardships due to the strength of the kyat.

Many business owners are asking for the CBM to step in to help stabilize the exchange rate as they are already having to deal with virus outbreak. Although CBM is responsible for the stability of the monetary system, it also needs to make the country’s economy develop as well, he said.

Local businesspeople especially exporters and those in the agricultural sector have been asking the UMFCCI what action CBM will take on on interest rates to mitigate economic impacts and current exchange rates said U Aye Win.

The garment, tourism, and export sectors, as well as small and medium-sized enterprises and farmers, are facing hardships due to the current situation, said Daw Khine Khaine Nwe, secretary-general of the Garment Manufacturers’ Association.

According to some authorities in China, the production of some raw materials such as textiles and fabrics will return to normal by the end of April, and the raw material manufacturing industries in China are currently operating at just 30 percent capacity.

So far, 13 garment factories based in Myanmar have reported to the Ministry of Labour that they will shut down due to shortages of raw materials, said U Maung Maung, chair of Myanmar Trade Union.

During this crisis period, all relevant authorities and business entities need to prepare to overcome this socio-economic crisis, said Daw Khine Khine Nwe.

The possibility that the virus outbreak will stretch on longer than expected has to be prepared for, said U Maung Maung.

At the same time, necessary preparations should be discussed in case the export market of Myanmar collapses, said U Maung Maung.

An agreement was reached to hold meetings more frequently between the government, employers, and workers to find solutions to cope with possible factory shutdowns.

The Yangon Region government has said no one has been identified with COVID-19 yet and reiterated that will release relevant information about the outbreak. – Translated

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Source: Myanmar Times

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