CNI News
30 Nov 2022
If Russia refuses to accept Kyat payments and uses its Rubles in bilateral trade and investment, the Myanmar currency is unlikely to appreciate, economists told the CNI.
The economists were responding to the comment made by SAC Spokesperson Maj-Gen Zaw Min Tun in a press conference. The spokesperson said that Kyat was likely to appreciate if it was linked to Ruble.
An economist who requested anonymity told the CNI, "Trade and investment between the two countries is just a fraction of the total representing only 2 to 3 percent. Although the two currencies are linked, Ruble will play the central role. Russia will make payments in Ruble for exports from Myanmar, which will have to import Russian products in Ruble. Russia will not accept Kyat payments because the Myanmar currency is not stable. Even if they accept, they will do so only a small amount. Will Russia accept Kyat payments for Russian products? So, this will have no impact. Let's say one Ruble is equal to MMK 100. However, the exchange rate will not always be stable because Kyat is depreciating constantly. So, they will have to pay more when they import Myanmar products. They can avoid such problems if they accept Ruble payments or US dollar payments. If they accept Kyat payments, they will suffer losses."
Snr Gen Min Aung Hlaing meets Russian President Putin.
Currently, Myanmar is using Yuan-Kyat payments and Baht-Kyat payments in trade with China and Thailand.
Moreover, it is implementing the Rupee-Kyat payment system in trade with India.
The appreciation and depreciation of the Myanmar currency depend not only on currency links but also on export volume of the country, Dr Soe Tun, a Myanmar entrepreneur, told the CNI.
He told the CNI, "The appreciation or depreciation of Kyat depends on export earnings. If Russia imports a large number of products including rice and corn from Myanmar, Kyat will appreciate against Ruble.
The main point is that they will accept Kyat if they can import products from Myanmar in Kyat. So, export volume is more important than currency links. First, the Ruble-Kyat payment system must be used.
A commercial port.
Second, we must export a large number of products to Russia or other countries. The currency will be strong depending on such factors. Russia needs to import products from other countries although the trade between the two countries is only fractional. I think Myanmar's exports to Russia will increase gradually."
Compared with last year, the export volume of Myanmar has not increased this year, he added.
Myanmar has signed MOUs with Russia for cooperation in various sectors.
Moreover, it is also planning to use MIR cards, an electronic payment system used in Russia.
However, the economists agreed that direct cooperation with Russia is one of the achievements of Myanmar.
As Myanmar is harvesting crops currently, the exports of agricultural products will help appreciate Kyat, according to them.
