Exporters in the country are worried that the exchange rate of the kyat against the US dollar will dip below Ks1,300.
“Businessmen are watching the foreign exchange market closely. It will negatively affect the exporters if the exchange rate slips below Ks1,300,” said Daw Toe Nanda Tin, vice president of Myanmar Processor and Exporter Association.
The majority of exporters imported raw materials at an exchange rate of Ks1,360 per dollar. However, the rate declined to Ks1,320 when they exported their products. There is a gap of Ks40 per dollar in the export versus import exchange rates.
The downward trend in the kyat-dollar exchange rate started from the second week of January. Previously, a dollar fetched some Ks1,356. Currently, the rate has dropped to Ks1,320.
The Central Bank of Myanmar scaled down the US dollar exchange rate from Ks1,340 to Ks1,330 within six days.
U Ye Myint Maung, president of Myanmar Food and Exporters Association, said the export businesses will thrive only if the rate is stable in the foreign exchange (FX) market.
“We cannot do anything as the rate is down due to the depreciation of the dollar in the global market,” he added.
In 2008, exporters were battered by the drop in the exchange rate by some Ks300.
The exchange rate was on the rise throughout 2017 and hit an all-time record of Ks1,380 per dollar. The inflation rate, interest rate, terms of trade, country’s current account and deficits, political stability, as well as economic performance, contribute to the ups and downs in the dollar price. Currently, foreign currencies have appreciated slightly against the US dollar in the global FX market. International business websites mention that the dollar depreciation is attributed to the high global gold price and the drop in the stock market.
By May Thet Hnin