Kyat’s slide expected to continue with introduction of new high-denomination banknote

By Admin 24 Jul 2023

DMG Newsroom
24 July 2023, Sittwe

Business owners and political observers fear the Myanmar kyat will depreciate further due to a regime plan to introduce 20,000 kyat notes into circulation, doubling the size of the nation’s current largest banknote denomination, the 10,000 kyat note.

The new banknotes will be issued from July 31, the regime announced on Sunday.

Issuing a higher denomination note of 20,000 kyats will have impacts on basic foodstuffs and business, said business owners.

“We can only pray that it will not have serious impacts on the people,” said a business owner.

Junta-controlled state media reported that the new banknote will be issued to mark the completion of the Maravijaya Buddha image in Naypyitaw, and the one year birthday of a white elephant that was discovered in Arakan State last year.

The reports said the 20,000 kyat notes will be issued in a limited number beginning July 31, adding that the new banknotes would be available only by exchanging damaged lower denomination notes with the same value at branches of the central bank in the capital Naypyitaw and the cities of Yangon and Mandalay.

Former political prisoner U Khaing Kaung San criticised the regime’s move to issue the higher denomination currency, saying it always results in inflation and food price hikes.

“The salaries for government employees are very low considering current commodity prices. There is a need to take this into consideration,” said U Khaing Kaung San.

Gold shops and money changers have temporarily suspended their business after the regime announced the release of 20,000 kyat notes.

“If food prices increase further, things will be extremely difficult for people who survive on daily wages. Here, many people affected by the storm still can’t resume their businesses, and they won’t be able to make it if commodity prices go up further,” said Daw Htay Htay from Sittwe.

Pro-military Telegram channels pushed a message that the new banknote would not cause inflation, and that the Central Bank of Myanmar has warned against those who manipulate the currency exchange market.

Myanmar has been in a state of chaos since the military seized power in a coup in February 2021, with the kyat depreciating from less than 1,400 kyats per dollar per-coup to around 3,200 kyats per dollar currently.