Imported goods prices expected to further rise after exchange rate change

06 Aug 2022

DMG Newsroom
6 August 2022, Sittwe

Myanmar’s military regime has changed the reference exchange rate from 1,850 kyats to 2,100 kyats per dollar, which will lead to a further increase in the prices of imported goods and further appreciation of the US dollar on the open market, say business owners.

On Friday, the regime also relaxed mandatory currency conversion policies for exporters. The junta-controlled Central Bank of Myanmar issued a notification with immediate effect reducing the percentage of foreign earnings that traders are required to convert into kyats to 65%, down from a 100% requirement that had been in place since April.

“It will do little good for exporters, but the prices of imports such as oil, medicines and building materials may increase,” said the chairman of Arakan State Chamber of Commerce and Industry, U Tin Aung Oo.

Price hikes are expected as early as the coming week, but businesses are taking a wait and see approach as to whether the regime’s relaxation on mandatory currency conversion will bring any change on the ground, he said.

The regime has been forced to ease its mandatory currency conversion policy because the economy is on the brink of collapse, said a businessman from Arakan State who asked for anonymity.

“They do all those things to control US dollars, but it amounts to killing the people. The weakening of the kyat will lead to increased commodity prices. The more the prices increase, the more people will have to suffer. So, what they have done amounts to killing the people,” he said.

Vendor Ma Thein Thein Aye from Sittwe said her family will go hungry if food prices continue to rise.

“We are already struggling to make ends meet because of soaring food prices. How can we survive if prices increase further?” she said.

Political analyst U Than Soe Naing blamed mismanagement by the junta leadership for Myanmar’s economic crisis.

“Because the regime seized power, the international community has imposed sanctions and suspended financial aid. And the regime is doing as it pleases without any sympathy for the people. People are suffering due to flawed policies,” he said.

The regime must hand over power to the people if Myanmar is to overcome the crisis, he said, adding that people will continue to suffer if not.