Myanmar's currency plummets to new lows as the country's economy suffers from a coup

[ASEAN NOW Content Team]

 

Myanmar's currency fell to a new low this week, nearly eight months after the military coup, raising fears of deepening social and economic instability in the country, which has been ravaged by the takeover.

The US dollar exchange rate hit a new high of roughly 2,500 to 2,700 kyats per dollar on Tuesday.
The exchange rate was between 1,300 and 1,400 kyats per USD before to the February 1 revolution.
According to reports from several money exchanges and the underground market, the rates on Wednesday are the same as they were yesterday.

 

On Tuesday, the price of gold on the local market hit a new high of more than 2.25 million kyats per tical, up substantially from a little more than 2 million kyats the day before.
On that day, gold businesses were forced to close, and the market didn't reopen until Wednesday afternoon, with prices at 2.2 million kyat per tical.
The tical is a traditional Burmese gold weight measurement of 16.33 grammes (just over half an ounce).
Prior to the coup, the price of gold was 1.32 million kyats per tical.

According to market sources, people are solely looking to acquire US dollars on the currency market, with almost no one wanting to sell, driving the greenback's value up sharply against the local currency.

 

“Dollar sales are nearly non-existent, and demand [for US currency] is rising as more individuals want to buy than previously,” stated an anonymous businessman.

 

The Myanmar Central Bank has been selling reserve dollars on a quota basis to select enterprises importing vital commodities like petrol, cooking oil, and medications through local private banks under the junta.
The merchant, however, stated that there is a high demand for dollars in the market.

 

In an attempt to stabilise the exchange rate, the central bank has sold about 190 million US dollars to the market since the coup.
Sixty million dollars of that total was sold in September alone.

The junta, however, refusing to acknowledge the currency's depreciation, established the official exchange rate at roughly 1,755 kyats per USD on Wednesday.

 

Economic slowdown, financial crisis, and political instability in the aftermath of the coup, according to economists, have caused volatility in the US dollar/kyat exchange rate, with the banking crisis escalating into a currency crisis.

“It is primarily based on political instability,” a business analyst in Rangoon remarked.
Some wealthy people will acquire gold and dollars as the political situation becomes more volatile.
The Central Bank is also keeping an eye on the situation.
However, because the bank does not have a large amount of money, it is unable to exert control.”

 

He claimed that the country's current economic issues could not be rectified just through economic policy, but only through political change.