Kyat’s fall against the greenback has slowed down tracking the Central Bank of Myanmar’s action.
Kyat devaluation against the dollar stops at approximately K3,300 in the shady dealings. At present, the Central Bank of Myanmar (CBM) sets the reference exchange rate at K2,100.
CBM has set the currency trading band at 0.3 per cent for the Kyat to fluctuate between these two specified upper and lower exchange rates for transactions, selling or buying, according to a directive issued by the CBM on 10 August 2022.
Therefore, financial institutions including the banks and informal money exchanges are instructed to set a dollar value at K2,094 for buying and K2,106 for selling. Nevertheless, the over-the-counter Kyat-dollar exchange rate was K3,270 for buying and K3,320 for selling on 3 October.
There is a large price difference between the reference rate of the CBM and the unofficial market rate. Yet, there is no way for the CBM to set the new price, as per the notification released in May 2023.
The dollar gained to around K4,000 on 19 August 2023.
Under Section 9 of the Foreign Exchange Management Law, only those entities holding foreign exchange dealer licences are allowed to deal in foreign currency and travellers’ cheques. Those holding foreign currencies without valid licences and permits will face legal actions under the law, according to the CBM’s notification released on 21 August 2023.
According to the notification (7/2014) dated 30 September 2014 issued by the Central Bank of Myanmar, stating that under stanza 15 of the Foreign Exchange Management Law, domestic residents are allowed to keep US$10,000 in a maximum or equivalent amount of foreign currencies for six months. If those foreign currencies that have been unused for over six months have to be exchanged in local currency at the market price through authorized dealers or deposited into bank accounts.
Those illegally holding foreign currencies will be taken action under the Foreign Exchange Management Law, the CBM warned again.
Following that notification, the foreign exchange transaction calmed down and the rate dropped gradually. — NN/EM
