Fraudsters circulating rumours to hike exchange rate will face legal actions: CBM

Investigation and prosecution of market manipulation to hike the exchange rate in the local forex market with malicious rumours will be undertaken, according to a statement of the Central Bank of Myanmar on 10 February.
Some exporters, importers and banks are attempting to raise the exchange rate owing to the rumours. The statement called for bank institutions to govern the market and investigate those fraudsters who circulate rumours.
The CBM released a notice that the exporters, importers and banking institutions are asked not to elevate the exchange rate. Those banking institutions that will not abide by financial regulations will face legal action as well.
At present, Kyat depreciation against hard currency persists at K2,860 in the grey market although the Central Bank of Myanmar set the reference exchange rate at K2,100 against the US dollar.
CBM has set the currency trading band at 0.3 per cent for the Kyat to fluctuate between these two specified upper and lower exchange rates for transactions, selling or buying, according to a directive issued by the CBM on 10 August 2022.
Therefore, financial institutions including banks and informal money exchanges are instructed to set a dollar value at K2,094 for buying and K2,106 for selling. However, the over-the-counter Kyat-dollar exchange rate was K2,850 for buying and K2,865 for selling on 10 February.
There is a large price difference between the reference rate of the CBM and the unofficial market rate. However, there is no way to set the new price, as per the notification released on 15 January.
Some unscrupulous people were allegedly spreading fraudulent news to manipulate the market and attempt to make the dollar gain, stating that changing reference prices and repaying financing for the fuel oil companies, according to the statement.
The CBM injected liquidity into the banking sector. Approximately US$108 million were sold within 45 days in the market through foreign salary transfers. More amount will be put for sale.
Last August, a dollar value hit an all-time high of over K4,500 in the grey market.
Consequently, the CBM sold dollars at its auction market for the sectors in need, to control the soaring dollar. A total of $443.8 million were sold at an auction rate in 2021 as well. — NN/EM