THE US-dollar exchange rate to MMK experienced a fall from K1,300 in 2015 to K1,100 until last April but has risen to K1,260 again recently.
The rising US dollar exchange rate to MMK has led to higher prices for imported goods and local consumers have to buy imported commodities at higher prices but it is an opportunity for exporters and foreign investors, according to Chairman Dr Soe Tun of Myanma Vehicle Manufacturing and Imports Enterprise.
“Foreign investors now get 128 million MMK for their 100,000 US$ but in the past they received only 110 million MMK. They are making 10 per cent more MMK for their dollar than they used to. The current US dollar exchangerate can attract foreign investment. Similarly, exporters get 10 per cent more MMK for their exports. It is an opportunity for them,” he said.
“Major products of Myanmar are agricultural produces. During the rainy season, it is difficult to export agricultural produces and export volume drops. During the last week of September, exports to China dropped as Chinese authorities seized commodities imported from Myanmar. Exports of pulses and beans to India also fell because the Indian market is closed. Timber export was also banned. Oil and gas prices in the international market have fallen sharply. As a result, Myanmar has imported more commodities than it can export and the exchange rate is rising.” Dr Soe Tun said.
Some economists pointed out that monetary stability is important for economic growth and attracting foreign investors.
Economic stagnation of the world economy and the Chinese economy also has an impact on the Myanmar economy, Dr Soe Tun added. Economists also pointed out that the Central Bank of Myanmar should change the illegal money remittance from Myanmar workers in foreign countries into a legal remittance system. If it continues to be an illegal market, it will negatively impact the economy, they said.
“About 4 million people from Myanmar are working abroad. The CBM should arrange for them to remit their wages legally as soon as possible.” Dr Soe Tun said.
Although 10 foreign banks have been licensed to operate in Myanmar, only foreign firms are allowed to open accounts with them and Myanmar companies have to open accounts at banks in Singapore.
“Budget deficits also cause the US dollar exchange rate to rise. To reduce the budget deficit, it is necessary to collect more taxes. Government ministries should help promote exports and reduce production costs for local entrepreneurs,” Dr Soe Tun said.
“Merchants cannot sell their pulses and beans and have had to store their goods. They are losing because of falling prices. However, pulses and beans farmers have to buy fertilizers, pesticides and their other needs at higher prices due to higher US dollar exchange rates.” said pulses and beans m U Soe Myint Win.
The US dollar exchange rate rose to its highest to 1,288 MMK on 4 October and fell again to 1,255 MMK now.—Min Thit
Source: The Global New Light of Myanmar
