Fluctuations, manipulation have serious consequences

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THE Central Bank of Myanmar recently warned private lenders that they faced investigation for possible involvement in currency manipulation following a plunge in the value of the kyat versus the U.S. dollar.
The warning does not appear to have been unfounded. In June, a friend went to an official money changer to buy a fixed amount of US dollars before departing on an overseas trip. But the staff at the counter refused to sell the currency, saying they were only buying it.
At that time, the exchange rate was stable. But my friend became suspicious that it was not an ordinary situation in the monetary market. Some days later, the kyat began to fall against the dollar. The circumstance raised suspicions that the downtrend was not accidental.
Inflation and wild currency fluctuations can damage, even topple, the whole economy of a country. Despite warnings from the government and central bank officials, the exchange rate is still declining.
While the central bank has made attempts to adjust the official currency rate, some economists have said it should take a stronger hand in managing the exchange rate.
It can be quite difficult for ordinary people to understand financial theories or terms. Fluctuations and manipulation of the financial market have had serious consequences for the country and the people, through higher commodity prices and falling purchasing power, which signals a decline in the country’s GDP.

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