Dollar exchange rate in Myanmar hits two-year low

The exchange rate in Myanmar has reached its lowest level this year, with the kyat now trading for less than K1280 per US dollar in the local market. On October 9, the Central Bank’s reference exchange rate was K1279.50 to the dollar.

The dollar has been weakening against the Myanmar kyat due to a fall in local demand for the currency to trade goods amid COVID-19.

Some traders are mulling additional fuel imports if the exchange rate continues to stay at those levels, but the general view is that the rate will likely be volatile. “The traders are waiting a bit more to see if the dollar will turn up again in the coming weeks before making some purchases. At current levels, US traders are making purchases at unfavourable conditions,” one foreign exchange agent told the Myanmar Times.

Local exporters are watching the exchange rate with caution, too. “During the paddy and corn harvesting season and the fishery export window, the Central Bank and other related ministries should act to control a highly volatile dollar exchange rate as early as possible. A stable and predictable exchange rate is very important for Myanmar exports to be competitive in the international market,” U Ye Min Aung, chair of Myanmar Rice Federation, wrote on social media.

The Central Bank of Myanmar (CBM) has been increasing its dollar purchases in the local market in attempts to stabilise the weakening dollar rate over the past few months. This month so far, scooping up close to US$60 million over the past two months. It has bought up to US$26 million a rates between K1279 and K1308 to the dollar so far this month.

While those are record purchases by the CBM, it is still insufficient to move the exchange rate, brokers said. “The CBM has purchasing power. They should buy more dollars. The more they procure, the better,” one senior staffer from a local bank commented.

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Source : Myanmar Times

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