Myanmar’s military junta has printed approximately 30 trillion kyats in the three years since its coup attempt, causing the value of the currency to fall drastically, according to both the civilian National Unity Government (NUG) and Australian economist Sean Turnell.
“While there may be other contributing factors to the decline in the value of the Myanmar currency, the fundamental cause remains the junta regime’s massive issuance of nearly 30,000 billion kyats since the coup attempt until today,” said U Tin Tun Naing, the NUG’s Union Minister for Planning, Finance, and Industry.
He spoke during a press conference held on Monday, alongside Sean Turnell, an Australian economist and former adviser to detained State Counselor Daw Aung San Suu Kyi.
They emphasized that their estimate is based on data collected from publicly available sources via international monetary organizations, as well as internal sources within the regime.
In contrast, during the civilian National League for Democracy (NLD) regime that was ousted by the junta, a total of 3.656 trillion kyats was printed in 2019 and 2020 to address the economic challenges arising from the COVID-19 pandemic.
In just three years and three months, the junta has printed more than eight times the amount of money that the NLD government printed in a two-year period, the NUG said.
As a result of this arbitrary printing of money by the junta, the value of the kyat plummeted to around 5,000 per USD in the past week.
In response, the junta urged businesses engaged in trade to use the barter system instead of money, in its latest attempt to alleviate the impact of the country’s severe shortage of foreign currency.
Meanwhile, the domestic gold market has witnessed a historic surge, with prices reaching 5.8 million kyats per tical (16.33 grams) on May 30. This starkly contrasts with the pre-coup rate of 1.3 million kyats per tical in 2020.
The junta has taken action against money changers, gold and jewelry dealers, and merchants it accuses of manipulating prices. Firstly, it arrested 21 gold and jewelry brokers and merchants. Then, based on information gained during those investigations, it issued arrest warrants for another 10 gold and jewelry shop owners, including some well-known figures.
With state revenues in decline as the economy contracts—but with military spending at record levels—Myanmar’s growing budget deficits are being financed by the “highly destructive expedient of printing money”, Turnell said.
The junta’s military spending amounted to 1.7 trillion kyats in fiscal 2021-22, and 3.7 trillion kyats in FY2022-23, according to figures released by the regime. Spending is projected to reach around 5.6 trillion kyats in FY2023-24, equating to 4.1 percent of GDP and 17 percent of total expenditures, marking a significant increase from the pre-coup period. In FY2019-20, under the NLD government, military spending accounted for 3 percent of GDP and 10.4 percent of total expenditures.
“Over 70 percent of Myanmar’s deficits are now funded this way. Inflation and the monetary instability already noted are the highly predictable consequences,” Turnell said.
The economist pointed out that Myanmar’s sovereign debt under the junta has sharply increased, notwithstanding the “promiscuous” use of the money printing presses.
In 2020 under the NLD regime, Myanmar’s state debt was a comfortable 42 percent of GDP; this has increased to 63 percent under the junta, according to figures from the World Bank.
At the time the civilian NLD government was ousted in February 2021, Myanmar’s foreign reserves of US$6.8 billion were held in banks across the US, Switzerland, Hong Kong, Singapore, Malaysia and Thailand.
However, based on cumulative foreign exchange net flow figures collected between October 2020 and February 2024, the NUG claims the junta has already utilized $3 billion from these reserves. As a result, the remaining reserves amount to less than $3 billion, with $1.1 billion frozen by the US.
“By examining these figures, it becomes evident that the junta possesses very limited foreign reserves. This scarcity explains their aggressive actions, like robbing businesspeople in their pursuit of dollars,” said Tin Tun Naing.
