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Myanmar central bank sees currency stabilising on new measures By Reuters

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© Reuters. FILE PHOTO – Myanmar’s banknotes in kyat are counted by workers at the Yangon branch of a bank on April 2, 2012. REUTERS/Soezeya Tun/

(Reuters) – Myanmar’s military-appointed officials are making significant progress towards addressing the currency crisis. The kyat has stabilized and there have been efforts to control prices, a top central bank official stated.

The kyat lost more than 60% of its value https://reut.rs/2WP7BJi in September, driving up food and fuel prices in a fragile economy that has languished since a Feb. 1 military coup and is on course for a double-digit contraction this year.

Win Thaw is the deputy governor of Central Bank of Myanmar. He told Reuters that a rule requiring overseas banks to receive excess foreign money within 30 days of receipt this week was helping to increase supply and reduce the exchange rate.

He said that the rate was falling to normal conditions.

The 30-day deadline will “be one of the factors that lowers it”, he stated.

Myanmar has yet to disclose its foreign currency reserves. According to World Bank data, Myanmar had $7.67 billion worth of foreign currency reserves as of the close 2020. This was before the February coup.

Skyrocketing commodity prices have always been a problem for Myanmar’s military government. In 2007, the monk-led “Saffron Revolution,” saw the rising cost of cooking gases as one of its triggers.

Last week, the military stated that its economic troubles were due to “outside factors” as well COVID-19 epidemics.

Zaw Min Tu, the bank’s spokesperson, stated that they could not meet local dollar demand.

Win Thaw expressed hope that an increase in exports expected in November or December will be a positive sign.

Dollar prices will fall if more foreign income is available. “It will slowly come down, and it will return to its usual rate,” he stated.

After trying to tie the kyat 0.8% on either side of the reference rate for the dollar, in August the central bank abandoned this measure due to increasing pressure.

In September, money exchanges were trading at 1,695 Kyat per dollar. However, that number soared to 2,700 by Sept. 28. This compares to 1,395 Kyat prior to the February coup.

This week, authorized dealers sold dollars at 2,200-2,300 Kyat.

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