Kyat stopped falling against greenbacks and the Kyat-US Dollar counter rate has dipped to K2,850 in the local forex market.
During 12-15 January 2023, the hard currency was around K2,900 in the unauthorized market. Thereafter, the rate slid again following the meeting of the governor of the Central Bank of Myanmar (CBM) with the money changers (non-bank financial institutions) on 16 January 2023. As they are highly involved in the foreign exchange business, the governor directed them to keep the CBM posted on any market manipulation that destructs price stability. Consequently, the exchange rate decreased a bit.
The CBM set the reference exchnge rate at K2,100 against the US dollar, showing a large price difference of K700 compared to the unauthorized market rate. However, there is no way to set the new price, as per the notification released on 15 January.
Some unscrupulous people were allegedly spreading fraudulent news to manipulate the market and attempt to make the dollar gain, stating that changing reference prices and repaying financing for the fuel oil companies, according to the statement.
The CBM injected liquidity into the banking sector. Approximately US$108 million will be sold within 45 days in the market through foreign salary transfers.
CBM has set the currency trading band at 0.3 per cent for the Kyat to fluctuate between these two specified upper and lower exchange rates for transactions, selling or buying, according to a directive issued by the CBM on 10 August 2022.
Therefore, financial institutions including banks and informal money changer are instructed to set a dollar value at K2,100 for buying and K2,106 for selling. However, those rates are not effective in trading for now.
Last August, a dollar value hit an all-time high of over K4,500 in the grey market.
Consequently, the CBM sold dollars at its auction market for the sectors in need, to control the soaring dollar. A total of $443.8 million were sold at an auction rate in 2021 as well. —NN/EMM