Workers count Myanmar kyat banknotes at a local bank office in Yangon, April 2, 2012. REUTERS / Soe Zeya Tun /

October 7 (Reuters) – Myanmar’s military authorities are making progress in tackling the currency crisis, with the kyat stabilizing and efforts underway to keep prices under control, a senior central bank official said.

The kyat lost more than 60% of its value in September, pushing up food and fuel prices in a fragile economy that has languished since the February 1 military coup and is on track for a double-digit contraction this year. Read more

Win Thaw, deputy governor of the Central Bank of Myanmar, told Reuters that a rule this week requiring exporters to sell excess foreign exchange to banks within 30 days of receiving it was helping to boost supply and make lower the exchange rate.

“The rate is getting back to what it should be under normal circumstances,” he said by phone.

“This limited period will become one of the factors to lower it,” he said, referring to the 30-day requirement.

Myanmar did not disclose the level of its foreign exchange reserves. World Bank data shows it only had $ 7.67 billion in reserves at the end of 2020, before the February coup.

Soaring commodity prices have always been problematic for Myanmar’s military governments, with the cost of cooking gas being one of the triggers of a monk-led “saffron revolution” in 2007.

The military said last week that its economic problems were caused by “outside factors” and outbreaks of COVID-19. Read more

Its spokesperson, Zaw Min Tun, said the central bank had been unable to meet local demand for dollars.

Win Thaw said he hoped that an expected increase in exports in November and December would help.

“If there is more export income, the dollar price will not increase any more. It will gradually fall and return to its normal rate,” he said.

The central bank had tried to peg the kyat at 0.8% on either side of its benchmark rate against the dollar in August, but abandoned the measure as pressure on the exchange rate increased.

Silver exchanges were priced at around 1,695 kyat to the dollar in early September, but this figure climbed to around 2,700 kyat on September 28. This compares to 1,395 kyat before the February coup.

This week, authorized dealers sold dollars for 2,200 to 2,300 kyat.

Reuters staff reports; Writing by Martin Petty; Editing by Robert Birsel

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