Yangon – Despite the absence of any coronavirus cases in Myanmar, the virus is affecting tourism, international trade, garment factories and banks.
This week the Central Bank of Myanmar (CBM) had bought US$9 million (12.6 billion kyats) from the exchange markets to maintain the exchange rate as the dollar fell to 1,300 kyats.
Between January and February, the CBM also bought $66 million (92 billion kyats) from the auction markets to address the falling dollar.
On Thursday (March 12) the CBM also cut interest rates by 0.5 percent to boost economic development.
This week India shut its border to stop the coronavirus spreading and Bangkok Airways plans to suspend flights to Myanmar until October.
A Thai-Myanmar joint venture has been approved by the Myanmar Investment Commission (MIC) for a $200,000 hotel project near Kawthaung on the Thai border in Tanintharyi Region.
On Friday, the President’s Office formed a national central committee to address the economic impact of Covid-19.
Central bank to cut interest rates
The CBM announced this week it will cut interest rates by 0.5 percent on April 1.
The minimum bank deposit rate will be decreased to 7.5 percent from 8 percent.
The maximum lending rate will also be lowered to 12.5 percent for collateralized loans from 13 percent and 15.5 percent for non-collateralized loans from 16 percent.
Analysts told The Irrawaddy that they welcomed the interest rate fall.
“[The banks] can cope with a 2 percent fall if the CBM reduces interest rates. Businesses prefer lower rates,” banker U Ye Min Oo told The Irrawaddy.
Central banks around the world have reduced interest rates to stimulate their economies.
India shuts its border
India has shut all borders gates into Sagaing Region and Chin State over coronavirus concerns.
On March 10, the Tamu border in Sagaing Region and Moreh in India’s Manipur State and Chin State’s border gate between Rihkhawdar and Zokhawthar in India’s Mizoram State were closed.
The Ministry of Commerce’s assistant permanent secretary U Khin Maung Lwin told The Irrawaddy that before the gates closed, $100,000 (140 million kyats) worth of goods had been exported to India each day through the Tamu-Moreh border. Meanwhile, $1,000 (1.4 million kyats) worth of chemical fertilizers and soft drinks were imported.
“Chin State’s border gate was shut by India with the coronavirus spreading. So tourism has stopped. It will also impact trade,” said U Soe Htet, the municipal minister of Chin State.
Joint Thai hotel project approved
The Myanmar Investment Commission (MIC) has approved a Thai-Myanmar joint venture to implement a $250,000 (350 million kyats) hotel project on the island of Hlaing Gu in Kawthaung Township, Tanintharyi Region, according to the Myanmar Times.
The project is expected to build 20 bungalows on the island, which currently has nine hotels with 500 rooms.
Kawthaung’s directorate of hotels and tourism said the hotel project should be receiving visitors by next year.
Hlaing Gu is popular for diving tours with 350,000 tourist visits per year with most visitors coming from Thailand.
Last year, Myanmar allowed an Italian company to invest in a $3.2 million (4.5 billion kyats) joint venture hotel project in Kawthaung Township.
Bangkok Airways to suspend Myanmar flights
Bangkok Airways has announced that it will suspend most flights between Thailand and Myanmar for seven months from March 29.
It has also canceled flights to Cambodia, Vietnam and the Maldives.
The airline said nine international destinations, including Yangon, Naypyitaw and Mandalay, would be suspended until Oct. 24.
Myanmar National Airlines and Air Asia have not canceled any flights.
Committee to address Covid-19 business impact
On Friday a national central committee was formed to address the economic impact of Covid-19.
The committee represents six ministries: Investment and International Relations; Planning, Finance and Industry; Labor, Immigration and Population; Commerce; Hotels and Tourism; and Transport and Telecommunications, along with CBM representatives.
It is tasked with responding to decreasing trade and tourism and creating jobs amid factory closures and over business failures.
The President’s Office assigned the committee to make plans to get supplies from other countries, besides China, if another illness like Covid-19 occurs in the future.
It hopes to plan for the long-term establishment of weaving, knitting, dyeing and sewing production in Myanmar in cooperation with the private sector.
The committee is assigned to report to the President’s Office on proposed relief, low-interest loans and tax exemptions for employers.
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