Myanmar central bank to sell forex reserves to stabilize exchange rate

The Central Bank of Myanmar has decided to sell foreign exchange reserves at a set rate in a bid to facilitate import of fuel and edible oil and prevent unwanted hike in foreign currency exchange rate, sources with the central bank said Thursday.

The sale of foreign currencies through financial institutions including the Myanma Economic Bank and Myanmar Investment Bank will start on Monday, said officials of the central bank.

Currently, the central bank has set its exchange rate at 1,105 kyats per U.S. dollar.

Myanmar's finance authorities, together with bankers and traders, are seeking measures to restore exchange rate stability in the wake of U.S. dollar's recent surge against Myanmar kyat.

Ways to mitigate exchange rate volatility which has triggered difficulties in the country's trading were discussed at a meeting between the Central Bank of Myanmar, private banks, government ministries and business federation.

The U.S. dollar surged to a record peak of 1,300 kyats against Myanmar kyat and the gold price to 800,000 kyats last week.

The appreciation of the U.S. dollar against the local currency and rising gold prices had forced the foreign exchange and gold market to a temporary close on a day last week but the situation improved as the U.S. dollar weakened against the local currency traded at 1,220 kyats per dollar, while the gold price fell from a record high to 755,000 kyats per tical, a traditional weight measurement that equals 16.33 grams, according to a market survey.

The U.S. dollar appreciation was deemed a result of factors including slow export, high import, high inflation, high demand for the U.S. dollar, a budget deficit and a stagnant real estate market. Enditem