RANGOON — The Burmese kyat has weakened relative to the US dollar due to high demand from importers. As of Friday, the price of a dollar was 1,235 kyats on the black market and the Central Bank’s official rate was 1,222 kyats.
The price for one dollar the week before was 1,215 kyats. “It has increased by 20 to 25 kyats per dollar during the week,” a Rangoon black marketer said.
The dollar exchange rate is higher than earlier this month when it reached 1215 Kyats to the dollar on Sept. 8, when the local gold price dipped to 867,500 kyats per tical.
Dr Soe Tun, the vice chairman of the Myanmar Rice Federation and owner of Farmer Currency Exchange, said local demand for the dollar was rising, pushing up the exchange rate.
“Importers need more dollars in the market, so the demand is high and the rate is slightly increased,” he said.
Burma has been importing items for infrastructure development projects, requiring more dollars. Importers have been exchanging dollars not only at official private banks but also on the black market.
U Myo Min Aung, vice chairman of the Myanmar Retailers Association, suspects some private banks may be playing with the market, contributing to the increase.
“Some banks might play the market to push up the rate. They will hold back dollars while demand is high to increase the rate,” he said, adding that an increased rate is not good for consumers.
“If the dollar rate keeps increasing, the price of importing pharmaceutical products, food, and home appliances will rise. This higher price will be passed on to consumers,” he said.
The dollar exchange rate stood at only 1,190 kyats per dollar last month. The import volume in Burma reached a value of US$6.6 billion while exports reached only US$ 5.0 billion from April to Sept. 9, according to the Ministry of Commerce.
Burma’s Central Bank published an inflation rate of 12.14 percent in late August, surpassing the predictions of the World Bank and worrying business leaders that inflation in the country could be on an upward spiral, dampening local demand for goods.
On Friday, the Central Bank said that the inflation rate was 12.12 percent while GDP growth was 7.3 percent.