Exchange Rate Usd to MyanmarUsd to Myanmar Exchange Rate
Federal Reserve issues warning against USD speculations
Myanmar's central bank has cautioned the monetary policymakers that they must expect to take steps as the market's dollar-cyat exchange rate rises far beyond the central bank's formal rate. "We' ve licensed and already alerted merchants, but they seldom obey our regulations. This is the first one we have contacted and alerted the bankers," said a chief executive of the Central Bank of Myanmar in Yangon.
Trade in the Kyats and US dollars outside a range of plus or minus 0.8 per cent of the central bank's day-to-day interest rate benchmark is illicit, albeit widespread. It administers the currency by fixing a day-to-day exchange rate against the US Dollars in day-to-day sales, which it then publishes on its website.
It is intended that the benchmark interest rate should mirror the current prices, although the difference between the two has widened this year. The benchmark rate was K1080 per USD last night, while the interest rate on the markets was K1130 per USD. Only in February, when the central bank's key interest rate remained at K1027 and the rate increased, the difference between the two began to widen.
A fortnight ago, the central bank increased its benchmark interest rate and thus briefly approached the rate of the markets, although the spread has in the meantime narrowed again. Even though the reason why the central bank has not increased its key interest rate in line with the markets is not entirely clear, inside analysts say that it could be an attempt to avoid further devaluations.
This year, the country has fallen against the US Dollars, as most of the world's major currency, largely due to the strengthening of the US Dollars and not to the weak state of the country. Analysts say that maintaining the government's formal interest rate below the current rate is not the best way to resolve the issue of Kyat's decline.
At the moment there is a rising need for the greenback, which is hard to deliver, which leads to a devaluation of the Kyoto Protocol against the greenback, he added. Superintendent U Khin Maung Nyo said the central bank must be in charge of sellin' enough bucks to satisfy demandmarket. "In order for the marketing mechanics to function properly, the regime must be strong," he said.
In the Myanmar Times, a celebrity businessman said speculations in the greenback have appeared like a safe bet lately, as its value has risen, while other conventional asset values such as automobiles and property have so far been less appealing in 2015. Yangon Foreign Exchange Markets Committee Chairman U Mya Than said, "Market tendencies are critical to determine the exchange rate, as the exchange rate is not just dependent on the central bank.
It is also necessary for them to work together to avoid excessive exchange rate fluctuations, as the measures taken by the central bank alone are not enough. Mya Than added that there is a risk that a central bank intervention could push foreign exchange trading underneath. "He said the non-formal markets would return when the regulations are stricter.
Mya Than, who is also chairman of Myanmar Oriental Bank, said the Central Bank of Myanmar could investigate other policy, such as the limitation of the amount of US dollar that can be drawn to 10,000 US dollar, unless there is evidence of the need for a large amount, otherwise the funds can be used for speculative purposes.
Thailand has a similar policies to defend itself against dollarization or the increasing use of the US currency in the U.S. instead of the country's own economies, he said. Not only the Kiev has depreciated against the US Dollar this year, but also most of the world's major economies. Since the end of 2012, there have been 17 German commercial bankers and 100 individual coin change machines that trade in four different major foreign exchange rates - US and Euro, as well as Malaysia's ringgits and Singapore dinars.
Other Myanmar central bank officials said that the central bank has not yet informed the markets how it will look for violations, but if they find someone who does not comply with the Foreign Exchange Administration Act, they will face fees or other fines. "The Federal Reserve has already relaxed the regulations to become a currency wheel.
She is hoping to give buyers more changes so moneychangers are not going to bother buyers with benefits and prices," he said. He alleged that the small number of large listed corporations on the stock exchange had heightened the potential for foreign exchange spread. "We have encouraged more non-bank coin acceptors to raise the level of competitiveness so that there will be no monopoly customs in the market," he said.
Bill acceptors are noteworthy for the conditions of the bill they will be accepting, although the central bank has tried to persuade them to pay for a broader range of banknotes that are corrupted.