Myanmar central bank weakens official fx rate for kyat currency by 13.5%

Myanmar central bank weakens official fx rate for kyat currency by 13.5%

People hold new Myanmar kyat banknotes with a portait of the late general Aung San, outside the Myanmar Economic Bank in Naypyidaw on Jan 7, 2020. (AFP file photo)
People hold new Myanmar kyat banknotes with a portait of the late general Aung San, outside the Myanmar Economic Bank in Naypyidaw on Jan 7, 2020. (AFP file photo)

Myanmar's central bank weakened its kyat currency from 1,850 to 2,100 per dollar on Monday, according to a statement published in a state newspaper.

Myanmar's economy has collapsed since the military seized power last year, halting a decade of reforms, putting pressure on the kyat's value against the dollar, and driving up fuel and food prices.

Black market rates for the kyat remain 20% to 30% higher than the central bank's new reference rate, according to figures from online groups where the currency is traded unofficially.

The central bank, whose senior ranks are increasingly populated by junta officials, has this year announced a series of measures to control currency flows.

Local companies and banks have been ordered to suspend and reschedule repayment of foreign loans, deposit or exchange all their foreign currency at local banks within one working day, and ministries and local governments have been told not to use foreign currencies for domestic transactions.

Late last week, the central bank relaxed the first requirement, saying 65% of foreign exchange earned locally must be deposited in licensed banks, rather than 100%.

The central bank last adjusted the value of the kyat in April, to 1,850 from 1,778 to the dollar. 

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