CNI News

22 August 2023

Although the Central Bank of Myanmar has released various policies to control high prices of gold and foreign currencies including dollar, because exact and certain explanations were not included in its statements, they are sort of pushing to make the black market grow, which should be reviewed, pointed out businessmen and economists.

Most of the businessmen and the people who are trading gold and dollar in the black market are doing their business thinking about how they can continue trading in the black market based on the statements of the Central Bank, said U Aung Pyae Sone, a car policy analyst to CNI News.

During the exchange of dollars and Myanmar currency

“ The problem is that those who are trading in the black market are always thinking what they can do from a weak point of a statement released by the government. The government released statements in the hope of ability to control monetary speculation. The government also has many economists. On the other hand, businessmen are always trying to get money from a black market route and speculating dollar. There are many dollar dealers who are speculating dollar only and some of them are about 70 years old. These people always have Plan A and Plan B to do what they should if a statement is released. What I want to say that no matter what the Central Bank releases statements, these statements can make the black market bigger." he said.

A resident inside the country has the rights to hold 10,000 US dollars at most or a certain foreign currency that is equal to 10,000 US dollars that has been earned legally within the six months from the day when it is earned. 

The foreign currencies that are left without being spent until over six months must be sold to authorized dealers at the market price or must be added to the bank account. If anyone holding foreign currency without having a license was found, he or she would be taken action against according to the Foreign Exchange Management Law, released the Central Bank on 20th August. Although the statement intended to control rising prices of US dollar, it could make the black market bigger, said U Thet Zaw, an economic analyst to CNI News.

The Central Bank's statement

"If it becomes too strict, the black market will grow even more. If you control any issue, there is always smuggling. Not only in the financial market, there is also smuggling in the commodity market if there are controls. About 400 or 500 US dollars is not enough for a person who wants to go abroad for further studies or for a person who want to go abroad to receive medical treatment. US dollars must be sold to them sufficiently. They will have to spend over ten thousand US dollars. They need to present strong evident. If not so, the black market will be bigger." he said.

The government should have an effective system to control the market and know whether basic economy of the country is systematically operating or not, said U Htay Aung Kyi, a banking expert to CNI News.

Central Bank Headquarters

“Firstly, when the government intervene, its control needs to be systematic. Is the control made up of effective tools according to the micro economic policy rule? To tell you honestly, the control is not so much qualified, I think. Secondly, it's necessary to know whether the country's economy was operating systematically for quite some time. When the government interprets the market, the tools it uses need to be fully efficient." he said.

Because the government departments had released the statements in which exact explanations were not included, they are making the prices of gold and dollar higher, pointed out businessmen and economists.

Although the authorities have said recently that they would arrest price speculators, whether arrests cam make the black market bigger or smaller should be thoroughly reviewed, they said.

It is necessary not to be policies like a rubber band and the policies should not changed frequently and the government should make solid and practical policies, said economists.