Myanmar to take measures to stabilize foreign exchange rate

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The Myanmar government is coordinating with related ministries to take necessary measures to stabilize the country’s foreign exchange rate, official media reported Tuesday.

The U.S. dollar exchange rate with Myanmar’s local currency kyat which started to increase again in August hit a new record in the second week of this month since 2007.

The exchange rate reached as high as 1,440 kyats per U.S. dollar at the informal market while the reference rate of the Central Bank of Myanmar (CBM) was 1,375 kyats per dollar over the week.

Officials of CBM met with those of the Ministry of Commerce and the Ministry of Planning and Finance Tuesday to seek ways of stabilizing the volatile U.S. dollar exchange market.

They discussed about plans to check the export earning inflow into country, to revise the current reference exchange rate system and to reduce smuggling and to make sure the foreign currency inflow from migrant workers in an effort to meet local high U.S. dollar demand caused by huge trade deficit, inflation and budget deficit.

The CBM liberalized the foreign exchange market in 2012, adopting managed float system. The CBM also conducted U.S. dollar auction to local banks every day and has established an inter-bank foreign exchange market in order to support the market.

However, some local private banks refused to sell dollars for local demand but buy in only to avoid the risk of losing interest so the invisible hands of black market are taking advantages of market instability with speculations. Enditem

Source: Xinhua/NewsGhana.com.gh

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