CNI News
4 June 2024
It was necessary to make dollars enter the country more so that monetary inflation, higher price of dollar and scarcity of dollars could be resolved, pointed out businessmen and analysts.
The reason why Myanmar Kyat is devaluing is because it is hard to buy dollars within the country and the government is carrying out to restrict and control the dollar market.
So, to make the value of Myanmar Kyat rise again, it was necessary to encourage Myanmar migrant workers abroad to officially transfer their foreign currencies to the country.
Moreover, it was also necessary to encourage exporters without controlling export earning policy and to raise the exchange rate for the foreign currencies to be transferred by the migrant workers, said an anonymous economic analyst.
While seeing Myanmar Kyat and US dollar
" If you look at it from an economic point of view, you need to make more supply of dollars. So, we need to encourage exporters. 35 percent of their export earning should not be exchanged at the rate of 2,100 kyats per dollar by force. Dollars sent by Myanmar workers abroad are exchanged at 3,300 Kyats per dollar. But the market price of dollar has been almost 5,000 kyats per dollar. Any workers won't transfer money to Myanmar. They will send money by hundi and Myanmar Kyat only will be received. Limitation of the price of dollar must be lifted, but the bad point is that the price of dollar will go up a bit and at the same time, the dollar supply will be higher. There are also other effects such that roads and bridges are damaged on the border trade route and a lot of money have to be paid to checkpoints on the way. But controlling the dollar market is wrong. Only if the policy can be changed, will it be convenient." he said.
Because of devaluation of Myanmar Kyat, prices are getting higher and the basic class is facing crises while the prices of gold and dollar are skyrocketing. Although gold shop owners and gold entrepreneurs had been arrested and taken action against to control gold and money price volatility, it wouldn't be effective mainly because new bank notes were being printed, Ko Nay Khant, a gold market analyst, told CNI News.
While seeing a 1,000 kyat note
" We must say it's not effective. The price of Myanmar Kyat is directly proportional to that of gold. On the other hand, new bank notes are ceaselessly being printed. As long as new bank notes are being printed, consider the fluctuations in gold prices as a speculation. It won't be convenient if new bank notes are being printed." he said.
Depreciation of the Myanmar Kyat and monetary inflation continue to occur due to wrong economic policy after 2021 that began the political change.
The inflation rate has already reached until 35 percent, according to economic analysts.
Decline in domestic production, lack of foreign investment and decline in border trade due to difficult transport are occurring because of political changes.
