Sudden and unexpected rise in the value of Myanmar Kyat

Last two days saw the sudden rise in the value of Myanmar kyat against other currencies in the black market. Until 20 January, the selling rate (rate they sell from the money exchangers) of US dollar in the black market of Rangoon was 1190 kyats per 1 US$. Yesterday, it suddenly dropped to 1100 kyats per 1 US dollar. Today, the selling rate dropped to 1070 kyats and the buying rate to 1050 kyats per 1 US dollar in the black money market of Yangon.

Two days ago, one Thai baht was exchanged at more than 30 kyats a baht in the black market. It suddenly dropped to 25 kyats a baht last night, and the black market money transfer services that provide the money transfer between Thailand and Myanmar had stopped their activity.

“Two days ago, for one hundred thousand kyats, you need to pay only 3,200 Thai baht. Last night, it suddenly rose to 3,400 baht. As the change was sudden and unexpected, we dare not continue our business activity. We decided to stop our business for a while. We are not sure when we will be able to resume our activity”, said one of the money transfer businessmen living in Bangkok.

Black market money transfer rate from Singapore to Myanmar is also falling. During 17 – 19 January 2009 period, the rate was 750 kyats for 1 Singapore dollar. On 20 January, it dropped to 737 kyats per S$ 1, then on 21 January, it dropped to 720 kyats. Today (22 January) rate is only 725 kyats per one Singapore dollar. This rate is for those who transfer S$ 1000 and above.

“This morning, I asked the money transfer agent. The rate he said was only 707 kyats, so I decided not to transfer”, said one of the computer IT professionals living and working in Singapore.

Most money transfer services in Singapore stopped their business activity while most Burmese also stopped transfering money back home to Myanmar.

In Chinese border, things are the same. From the previous rate of 56 Yuan per 100,000 kyats, the rate rised to 57 to 58 yuan, and today it was 61 yuan.

“Value of Burmese kyat is rising. Right now, all the trading stopped. Part of the reasons the trading stopped is due to the Chinese New Year. Chinese also don’t buy Myanmar products right now. Myanmar traders also stopped selling goods to China”, said one of the traders who trade jade in the Burma-China border.

“US dollar exchange rate in Myanmar mainly depends on the import-export market”, said Ko Aye Thura, one of the businessmen living in Yangon. He continued that the reasons US dollar value falls in Myanmar is because there is not many people using US dollar in Myanmar right now. The reason for reduced spending of US dollar might be due to restrictions from the government by means of import restriction, as well as due to decrease spending from Myanmar as part of the global economic problem, and also due to various other reasons.

“If there are more import traders, the value of US dollar usually rises. Rising value of Myamar kyat is mainly due to the reduction in the import. Here in Myanmar, there is no open market for the import and export, so it is quite difficult to say why. One thing sure is that it is not due to the strengthening of the Myanmar economy”, Ko Aye Thura continued.

Experts in the money market suggests that the reason for sudden rise in the value of kyat may be due to large influx of US dollars into the black market of Myanmar.

Because of the falling value of US dollar against Myanmar kyat in the black market of Yangon, there are very few US dollar trading among the residents of Yangon, except for those who need emergency money.

Source: Irrawaddy