Kyat depreciates at K2,860 against US dollar in market despite CBM’s reference rate of K2,100

Kyat depreciation against greenbacks persists at K2,860 in the grey market although the Central Bank of Myanmar set the reference exchange rate at K2,100.
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 sales.
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