With his regime starved of hard currency due to economic mismanagement and international sanctions, Myanmar junta chief Min Aung Hlaing bemoaned the “weaponization” of the dollar by some countries, which he said posed a threat to the financial systems and security of other nations.
In a video message to the 11th Moscow Conference on International Security in the Russian capital on Tuesday, the regime boss discussed what he said was the important role that ASEAN (Association of Southeast Asian Nations) unity played in the peace and stability of the Asia-Pacific region.
In the message, he said food security is the most important issue in the region, which is home to over 60 percent of the global population.
“Some countries are using the dollar, which is related to financial and security issues, as a weapon in trading the main agro-inputs including fuel and chemical fertilizers,” he said.
Min Aung Hlaing didn’t name the affected countries, but it’s understood his comments referred to Myanmar, which has been politically and socially devastated by his coup in 2021.
Since the takeover, the country has suffered from shortages of fuel and chemical fertilizers—both of which the country has to import. Making matters worse, the value of the country’s currency, the kyat, against the dollar is deteriorating daily, with the market exchange rate now approaching 4,000 kyats to the greenback. The daily minimum wage in Myanmar is 4,800 kyats.
To ease its reliance on the dollar in international transactions, the regime has sought alternatives, using Chinese yuan and Russian rubles in some cases since last year, but this has met with limited success.
The biggest blow to the junta so far came in June, when the US sanctioned two Myanmar state-owned banks— Myanma Foreign Trade Bank (MFTB) and Myanma Investment and Commercial Bank (MICB). They primarily function as foreign-currency exchanges and enable the conversion of kyats to US dollars and euros, and the reverse.
Since then, the prices of pharmaceuticals, commodities and fuel have jumped in line with the kyat’s slump against the dollar.
Following the US sanctions on the two Myanmar banks, Singapore’s United Overseas Bank (UOB)—known as the offshore bank of choice for Myanmar’s generals—told Myanmar banks early this month that it will cut ties with them by Sept. 1, including Visa and Mastercard transactions by Myanmar individuals and banks, limiting their transactions to those between UOB accounts.
The latest clampdown was also seen as a response to US pressure on Singapore to curb offshore banking and financial services for Myanmar’s military regime, as the actions followed a series of visits to Singapore since October 2021 by US State Department Counselor Derek Chollet and senior sanctions coordination officials, who met with officials from the Monetary Authority of Singapore.
