Yangon, Myanmar [ 03 Sept 2021]:
The economic situation in Myanmar has been rippled by the coup and fear is growing among the business world since reports suggest that the SAC is seeking help from other country to print the currency as the current financial turmoil is sinking into a deepening dive.
Currently, black exchange market sells at1820 MMK for a US dollar. The official figure shown from Central Bank of Myanmar stands at 1,712 MMK for a dollar which is still a big jump ballooning from 1,295.7 MMK prior to the election in November 2020. However, even in the previous administration under Aung San Suu Gyi, the Chindwin learned that the exchange rate in a black market stood around 1,500 MMK for a dollar despite 1,295.7 being an official figure by CBM.
People are turning to buy US currency and gold rather than keeping their money in the banks. The political analyst contacted by the Chindwin who based in Yangon and requested anonymity due to security concern suggests that people have no longer trust in the junta and the bank as well, as they could be collapsed any time as long as the military junta remains in power.
Of course, he added that it is more safer to keep US currency than the Kyats and the Kyats value is depreciated. Once again, black market is now back in the market, as in the past the military junta failed to control the black market but grew unabated.
A recent data released by John Hopkins University suggests that Myanmar is one of the top ten highest inflated countries in the world.
The Central Bank of Myanmar (CBM) issued a directive to exporters not to fail deposit their foreign income in foreign exchange accounts using the Foreign Exchange Management Law and Regulations.
People contacted by Chindwin regarding the inflation of currency and socio-economic situation in general acknowledge the country’s economic situation is in pretty bad shape, fuelling fear that the country’s economy will be out of control if they [SAC] go back and use FEC like before. Because of this directive, many fear that the country is heading back to the era of using FEC (Foreign Exchange Certificate) in an attempt to control the black market. FEC was initiated in 1993 and abolished in 2013.
People familiar with the matter of CMB’s notification told the Chindwin that this unprecedented and the banks are now operating under huge anxiety. Chindwin learned that banks have been ordered to restrict the withdrawal capacity and many experienced scrutinised questions over why they withdraw money and got remittance from overseas.