CBM narrows currency trading band from 0.5% to 0.3%

The Central Bank of Myanmar (CBM) changed the trading band around Kyat on 10 August.
To stabilize the exchange rate, the CBM set the currency trading band at 0.5 per cent for the Kyat to fluctuate between these two specified upper and lower exchange rates for the transaction, selling or buying, according to a notification issued by the CBM on 9 November 2021.
This directive was cancelled, hence, the CBM made a 0.3 per cent trading band to fix the floor and ceiling exchange rates starting from 10 August 2022.
Authorized dealers, money changers or non-bank financial institutions are obliged to maintain the exchange rate within the 0.3 per cent trading bank for any forms of transactions and foreign remittance.
This action came into effect starting on 10 August. Breaching the currency control rules will result in legal action according to the Foreign Exchange Management Law and Regulations, according to the statement signed by the CBM’s deputy governor U Win Thaw.
Kyat devalued against the hard currency US dollar at approximately K2,600 on the over-the-counter market although the Central Bank of Myanmar (CBM) set the reference exchange rate at K2,100, according to local forex traders.
Consequently, authorities sold the dollars at its auction market for the sectors in need, to control the soaring dollar and the outflow of foreign capital.
A total of $443.8 million were sold at an auction rate in 2021 as well.
Last 28 September 2021, a dollar value hit an all-time high of over K3,000 in the black market and consequently, pure gold reached a record high of K2.22 million per tical (0.578 ounce, or 0.016 kilogramme) in history.
Under the guidance of the Central Committee on Ensuring Smooth Flow of Trade and Goods, the Monitoring and Steering Committee on the Gold and Currency Market was formed on 17 December 2021 as gold and currency market stability play a crucial role in trade facilitation.
The objectives of the committee are inspecting and prosecuting market manipulation, checking if there is compliance with payment rules in the domestic market, and proceeding against those unscrupulous traders who intend to interfere with the free and fair operation of the market under the existing laws, by-laws and regulations in line with the official directives, illegal foreign currency holding, illegal trade and taking legal actions against price manipulators. — NN/GNLM