The Central Bank of Myanmar (CBM) revises its reference rate to Kyat 1,220 per USD

The Central Bank of Myanmar (CBM) has revised its reference exchange rate to K1,220 per dollar on July 17, moving it closer to market rates.

“I have advised [the CBM] to increase the reference rate long before so that it will be relevant to the market rate used by money changing services. This change will not immediately effect [market stability’, we will have to wait for weeks or a month,” U Than Lwin, advisor to local lender KBZ Bank, told Myanmar Business Today.

The increased reference rate will be beneficial for exporters but the benefits are offset by the low export levels while importers fret the possibility of the dollar strengthening more on the informal market.

“Dollar appreciation is good for exporters but it hurts importers and is not a good sign for the country and businesses in the long term,” U Khaing Myint, secretary of the Myanmar Rubber Association, told Myanmar Business Today.

The central bank rate has been allowed to rise since July 7, when it stood at K1,125 per dollar.

The informal exchange market has not seen any significant changes, and has been around K1,200 for several weeks. At the time of writing the report money changers were offering rates around K1,230 for a dollar.

The official exchange rate was set at 1,200 on July 13, but it kept slumping and slipped to 1,210 on July 15 and 1,216 on July 16.

Myanmar’s rapid economic expansion has caused a spike in imports, which were worth over $16 billion in the last fiscal year, causing a huge demand for the greenback and devaluation of the Kyat.

Source: http://www.mmbiztoday.com/articles/central-bank-moves-stabilise-kyat

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