Arakan merchants in India find kyat’s depreciation prohibitive to doing business

By Admin 15 Aug 2024

DMG Newsroom
15 August 2024, Sittwe

Merchants from Arakan State who have arrived in the Indian state of Mizoram are having difficulty buying commodities due to the precipitous decline in the value of the Myanmar kyat.

Previously, the exchange rate stood at around K50 per Rupee, but the exchange rate has increased to K85 per Rupee as of August 14. 

An Arakanese merchant in India said that there are traders who have returned to Arakan State without doing business as the prices of goods have risen steeply relative to the value of the kyat.

“When the Myanmar currency depreciates, if we exchange currency and buy it, the Arakan market will already incur a loss. If the traders then sell their products, the price of goods in Arakan State can rise to almost twice as much as before,” he explained.

As the Myanmar currency continues its slide in global currency markets, goods that were previously worth K1.5 million in India are now being bought for more than K2 million, and most Arakanese merchants have stopped buying.

A social activist said that since Arakan State’s situation is mainly dependent on goods imported from India, the decline in the value of the Myanmar currency could have significant impacts on the local grassroots.

“The devaluation of the Myanmar kyat has an impact on traders, and traders cannot afford to lose. So the problem is ultimately passed on to the consumer base,” the social activist added.

As the regime has cut off the flow of goods to Arakan State since renewed fighting began in November, many basic food products are primarily imported from India.

Merchants use the India-Paletwa-Arakan State trade route since the AA seized control of Paletwa Township, Chin State, in January.

Merchants in Arakan State now mainly import foodstuffs from India as the Indian government has banned the transport of fuel, medicines and fertiliser to Arakan State.