Myanmar’s border trade has ceased as the kyat continues to slump against the Chinese yuan and Thai baht, border traders have told The Irrawaddy.
The kyat fell heavily in August with exchange rates reaching 4,500 kyats per US dollar, over 90 kyats per baht and nearly 500 kyats per yuan.
Meanwhile, exports have declined as the regime’s new restrictions, including restrictions on export licenses, have hammered trade. Merchants have been instructed to use US dollars in border trade. And they are required to deposit their yet-to-arrive revenue in banks before they make shipments.
A merchant from Myawaddy, a major border town with Thailand in Karen State, said: “Before we transport cargo we have to bank our revenues with the government. So no one wants to export.”
The regime’s trade policies have meant major exports to Thailand — corn, sesame, beans and pulses — declined, increasing the trade deficit and the cost of imports.
Exports via Myawaddy from April to the end of August totaled US$363 million, while the imports exceeded $553 million. Exports have declined year on year by around $100 million, according to the junta-controlled Ministry of Commerce.
“There have never been such restrictions on exports. All the previous governments supported exports. Restrictions like this were never imposed before,” said the Myawaddy merchant.
Meanwhile, traders with China are waiting because of the weak exchange rate, traders in Muse, Shan State’s major border trade hub with China, told The Irrawaddy.
A rice merchant from Muse said: “It is quite difficult to quote prices because the exchange rate is volatile. A buyer agrees to buy goods from me at a price but the exchange rate changes suddenly when he is about to transfer the money. So the buyer cancels the transaction and traders have ceased buying and selling.”
The yuan recently hit 500 kyats from less than 300 and the rate is fluctuating wildly, said merchants.