June 29, 2017

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Dollar’s bounce back against kyat short-lived: market analyst

Customers exchange currency at a Yangon money changer. The U.S. dollar bounced back against the kyat in recent days, widening the gap between official and unofficial rates.
Customers exchange currency at a Yangon money changer. The U.S. dollar bounced back against the kyat in recent days, widening the gap between official and unofficial rates.

The U.S. dollar’s bounce back against the kyat is unlikely to be prolonged, as aid-related inflows will increase supply of the greenback, an economic analyst said Friday.
The Central Bank of Myanmar set its reference foreign exchange rate at
K1,256 to the dollar on Friday, up from K1,246 on Thursday and K1,234 earlier this month.
U Saw Naing of Applied Economics told The Global New Light of Myanmar that the dollar will not continue to rally, but rise and fall according to the market.
The kyat “will rise in value with strong demand for it following public donations for flood victims, while the supply of the dollar will increase with the inflow of international aid, curbing the recent jump in the exchange rate between the kyat and U.S. dollar,” U Saw Naing said.
Any further rises in the dollar are likely to be short-lived, he added.
Despite the official exchange rate of K1, 256 to the dollar on Friday, the selling rate was unofficially set as high as around K1, 280 in the market.
Dr Soe Tun, President of the Myanmar Automobile Manufacturers and Distributors Association, remarked that the recent dollar surge fuelled further increase in prices of imported goods.
Suspension of rice exports, limited exports in the rainy season, and demand for the dollar to import construction materials and foodstuffs in the wake of flooding, as well as the greenback’s strength on the global market, caused the sudden surge against the kyat, he said.

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