CBM says banks won’t hike interest rates amid excess bank reserves

The banks will not hike the interest rate and there are excess bank reserves for now, according to a statement (9/2022) of the decisions of the Monetary Policy Committee of the Central Bank of Myanmar (CBM) meeting. In order to tackle inflation, the committee considered whether it should raise interest rates or not.  The economic growth in the 2021-2022 financial year was 2.4 per cent, which is lower than the target of 3.7 per cent.

The committee decided at a meeting (5/2022) held on 30 May 2022 not to raise the interest rates as the country missed economic targets, cash deposits at the banks are declining, bank credit expansion still cannot happen and the currency in circulation of the banking industry just starts off. For the ease of inflation, the committee made the Minimum Required Reserves (MRR) ratio remain unchanged at 3 per cent after mulling over banking operations.

The committee raised the current account balance (CAB) of the bank institutions at the Central Bank from 2.25 to 2.5 per cent and lowered the bank reserves (cash) from 0.75 to 0.5 per cent. This way, the cash physically held by the banks will be deposited to the CBM and modifying reserve requirements will reduce the currency in circulation (CIC) and hope to steer the volatile inflation rate, as per the statement. Additionally, bank reserves are exceeding at present.

As the bank credit expansion cannot still happen, the committee decided to set an interest rate on the average excess CAB. The statement said it will initially create an interest rate corridor for the money market. Furthermore, to steer inflation, the committee also discussed issuing the CBM Bill as a monetary policy instrument. Regarding issuing CBM Bill, taking everything into account, advantages, procedures, setting face value and interest rate, types of issuing and payment methods were raised at the meeting and the committee determined to make the necessary preparations.

Source: The Global New Light of Myanmar

Thailand grants Myanmar citizens 45-day visa-free stay

Thailand has announced the extension of a visa-free period for Myanmar citizens from 14 days to 45 days, according to the statement of its Ministry of Foreign Affairs.

The Thai government extended the visa-free period for foreigners entering the country to 45 days from 30 days starting October 2022, and Myanmar citizens are also on the list for a 45-day visa exemption stay period. According to the bilateral agreement, any Myanmar passport holder is also among those who will be granted 45 days of visa-free stay in Thailand.

When the Thai government granted up to 30 days of visa-free stay to foreigners entering the country, Myanmar citizens were allowed only 14 days but could stay for 60 days with tourist visas. The announcement was issued by the Royal Thai Embassy in Ottawa, Canada on 30 September. But, the Thai Embassy in Myanmar has not released such an announcement yet. 

Source: The Global New Light of Myanmar


Imports indicate increase of $1.55 bln as of 23 September this FY against that of mini-budget period, MoC reports

The value of Myanmar’s imports between 1 April and 23 September of the current financial year 2022-2023 surged to US$8.159 billion, which reflects a sharp rise of $1.55 billion compared to the year-ago period, the Ministry of Commerce’s data indicated. The import value stood at $6.6 billion in the corresponding period of the past 2021-2022 mini-budget period.

The imports of capital goods and consumer goods declined, while the other import groups (intermediate goods and CMP businesses) witnessed a slight increase. The capital goods, such as auto parts, vehicles, machines and steel were brought into the country. The import value was estimated at $1.46 billion as of 23 September this FY. The figure was over $332 million lower than the value registered in the same period of the previous mini-budget period.

Meanwhile, Myanmar imported consumer products worth $1.49 billion, including pharmaceuticals, cosmetics, and palm oil. The imports of consumer products showed a slight decrease of $207.9 million compared with the same period in the previous FY. Intermediate goods make up the largest share of Myanmar’s imports, with petroleum products and plastic raw materials being the main import items.

This year, imports of raw materials climbed up to $3.8 billion from $2.399 billion registered during the year-ago period. During the same period, raw materials worth over $1.34 billion were also imported for the garment sector on the cut-make-pack (CMP) basis, showing an increase of $626.45 million compared with the same time of the last mini-budget period, as per data from the Ministry of Commerce.

Source: The Global New Light of Myanmar