The Central Bank of Myanmar (CBM) sold US$78 million at an auction rate over the past five months this year. The bullish hard currency gained in local forex market, reaching the peak of K1,730 on 12 May from K1,330 in January-end. In a bid to control the sharp daily gains of the US dollar, the CBM reportedly sold about 6.8 million dollars on 3 February 2021, $12 million in April, $24 million in May, $12 million in June and $24 million as of mid-July in the auction market. Consequently, the exchange rate stands at around K1,650 in mid-July.
The CBM trades the foreign currency with the authorized private banks under the rules and regulations of the FX auction market. The CBM’s move is aimed at governing the market volatility and supporting the state’s foreign exchange reserves, the CBM stated. The currency intervention is required to steer the own currency value. It is one of the responsibilities of the CBM to control the price. This is why the CBM practiced the foreign exchange intervention. The dollar gain will benefit the exporters. Yet, it will hike up the local food prices. The currency intervention is required to steer the own currency value.
The current political changes in Myanmar affect the currency market. Some people want to hold the hard currency during the difficult times, a market observer shared his opinion. The local forex market’s data showed that the dollar exchange rate touched the maximum of K1,345 and the minimum of K1,327 in January 2021. The rate moved in the range of K1,335-1,465 in February. It reached the lowest of K1,420 and the highest of K1,550 in March. The rate fluctuated between K1,550 and K1,610 in April. The rate fluctuated between K1,585 and K1,730 in May and it moved in the maximum of K1,595-1,620 last month.
In 2020, the exchange rate moved in the range of K1,465-1,493 in January, K1,436-1,465 in February, K1,320-1,445 in March, K1,395-1,440 in April, K1,406-1,426 in May, K1,385-1,412 in June, K1,367-1,410 in July, K1,335-1,390 in August, K1,310-1,355 in September, K1,282-1,315 in October, K1,303-1,330 in November and K1,324-1,403 in December. In 2019, the rates are pegged at K1,508-1,517 in July, K1,510-1,526 in August, K1,527-1,565 in September, K1,528-1,537 in October, K1,510-1,524 in November and K1,485-1,513 in December. On 20 September 2018, the dollar exchange rate hit an all-time high of K1,650 in the local currency market.
Source: The Global New Light of Myanmar