CNI News
3 August 2022
A bank officer from the Central Bank of Myanmar told CNI that the ministries under the Foreign Exchange Supervisory Committee are working to control the dollar price hike which is up even to 2,500 MMK per dollar.
Due to the dollar price increase outside in foreign currency exchange counters at the moment, they will handle in this way, he said.
“Therefore, the current situation shows that the price in the market is higher than that set by the Central Bank. There are a lot of reasons why the foreign currency rises. Based on these factors, the review is analyzed, the necessary policies are prepared and only then, it can be implemented. Not just the Central Bank, there is also the Foreign Exchange Supervisory Committee where the related ministries integrate. The in-charge ministers from this committee coordinate with the other ministries and are trying to resolve and control this issue,” he said.
The surge of the dollar price like this depends on the foreign currency flows. It is reported that the influx of the foreign currency through the sources of foreign currency inflow to the country will be performed.
Currently, the dollar exchange rate in external means is nearly 2,500 while the rate set by the Central Bank is 1,850. If this situation cannot be controlled well, it will lead to trouble, U Win (name changed) who is a businessman, told CNI.
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“If it takes too long, it will definitely be a huge problem. Now, some sailors open bank accounts abroad like Singapore and Thailand. They no longer send the money back to Myanmar, will just deposit in foreign accounts. And after that, they will either sell those there or bring cash. So, I think the foreign currency inflow to the banks here will go down gradually,” he said.
As the Foreign Exchange Supervisory Committee, it is reportedly known that it is being supervised to ensure that there is no unnecessary outflow of the foreign currency from the country and to just allow the required outflow.
U Win (name changed) who is a businessman said that in order to control the current situation, it will just be possible with the use of the Export Fact Policy which the previous military regime used and that policy should be applied for this situation.
“That policy is like it is only allowed to apply for the import based on the export earnings. And there is so-called export earning exchange rate. It is the highest in the past. And that export earning will be sold. Then, the importer buys that export earning and has to import. That way, dollar flow can be controlled. There, it is not like it allows importing for the whole percentage if the export is 100 percent. It just gives only 80 percent back out of 100 and permits to import. The Central Bank wants the remaining 20 percent to leave for the import of the important goods such as gasoline, diesel and palm oil. With this method, there will also be an incentive for the exporter and dollar flow can also be controlled,” he said.
Because of that policy during the previous military regime, as more dollars came into the bank, it didn’t cause trouble. As the dollars coming in were valued with 1,850 MMK from the Central Bank now, exporters also do not want to export anymore, according to the businessmen.
