CNI News
26 September 2023
Gold is currently traded in Myanmar based on the Thai domestic gold price and Thai baht price without calculating the Myanmar domestic gold price by the US dollar, according to gold entrepreneurs.
Gold is traded like this because dealing by Thai baht has not been tightened although US dollar dealers and traders are being taken actions against and arrested reportedly.
Besides, it is also because the Central Bank of Myanmar (CBM) has approved the Thai baht (THB) as a permissible currency for international payments and settlement transactions, said traders.
Thai bahts and US dollars
Although transactions are conducted after calculating Thai baht price, because the Thai baht price is altering, depending on the US dollar price, the dealings have anything to do with US dollar indirectly, said Ko Ne Khant, dollar and gold market analyst, to CNI News.
" For the time being, the right to hold US dollar is as you know. The arrests are rampant in the money transfers. The arrests are more relating to the US dollar. Among the gold, money and dollar, baht is freer from restriction. Another thing is that many diamond traders and gold entrepreneurs have been relating to Thai baht since before. It is also because pf the policy change which has allowed to use baht directly. It's kind of like replacing the dollar. Thai gold price is related to the world gold price. And Thai baht price is connected with the gold price. So, we still have anything to do with the US dollar indirectly. But it can't greatly impact. That its price is related is right. But it also related to our local demand and supply." said Ko Ne Khant.
The Central Bank of Myanmar approved the Thai baht as a permissible currency for international payments and settlement transactions on 14th August.
Thai bahts and Myanmar Kyat
Because Myanmar's gold price is calculated based on Thai gold and baht prices, when the Thai baht price changes, the prices of goods imported from Thailand can change. Moreover, Thai currency is not stable and its inflation has increased double, said U Thet Zaw, an economic analyst, to CNI News.
" To tell you frankly, although is calculated on the Thai gold and baht prices, gold is gold and goods are goods. But they both go depending on the exchange rate If the exchange rate changes, there may be a problem. When it is calculated like this because there are many arrests relating to US dollar, if the Thai baht price changed, it could affect both the gold price and commodity prices. Thai baht is not stable as well. Its inflation has double increased." said U Thet Zaw.
That gold entrepreneurs and gold traders use Thai baht instead of dollars was not for the stabilization of the gold price but because there were many arrests relating to US dollar, pointed out businessmen.
Moreover, whether there will be speculations about the Thai baht or not will need to be watched ,and if the Thai baht price went up, the prices of commodities imported from Thailand would rise, said businessmen and economists.
