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August 08, 2020

US dollar likely to remain low in local forex market

The US dollar has been sliding against the Kyat in the local currency market, with the exchange rate touching a low of K1,379 per dollar on 26 July, which slumped from K1,403 registered on 21 July, said money exchangers. At present, the global forex market sees the weak sentiment amid the coronavirus outbreak, with the US dollar index of around 94.35. At present, exports of rice, corns and pulses are increasing, whereas the local forex market is facing low demand. The exporters are unhappy with the strengthening Kyat as the weakening dollar might harm export income and the stability of internal forex market, said a market observer.
Additionally, people are reducing luxury import items and giving priority to food commodity due to the adversity of the coronavirus pandemic.
The dollar exchange rate is expected to remain low due to the weak demand in the local forex market, said traders. The Central Bank of Myanmar (CBM) is reported to purchase over 160 million dollars from private banks in the past six months to govern the market. The domestic forex market witnessed the maximum rate of K1,410 in June. Despite the CBM’s dollar purchase, the dollar is currently pegged at around $1,365-1,379 in the domestic market. In October last year, the dollar exchange rate had hit a high of K1,600. Thereafter, the dollar has been falling in the local currency market. — Ko Htet (Translated by Ei Myat Mon)

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