Market dollar rate influences on YGEA reference price

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Gold jewellery is seen at one gold outlet in Yangon.

Yangon Region Gold Entrepreneurs Association (YGEA) estimates its reference price based on the unauthorized exchange rate of the US dollar to adapt pricing to the gold market price, said YGEA Chair U Myo Myint.
Earlier, YGEA calculated the price depending on the Central Bank of Myanmar’s reference exchange rate of K2,100. That being so, there is a large gap between the price set by the YGEA and the market price based on the black-market dollar rate. Starting from 21 October, YGEA has calculated the reference at K2,470,000 per tical based on the unofficial dollar rate of K2,900.
“YGEA determines the reference price based on the over-the-counter market rate as fuel oil is transacted based on that rate. Similarly, the banks purchase the salary of Myanmar citizens working overseas that came into the bank accounts at the highest rate. The market price of gold is also related to the dollar exchange rate in the grey market. To narrow the gap between the YGEA reference price and the market price, the association will also calculate the pricing at K2,900,” U Myo Myint elaborated.
The gold spot price dipped to US$1,630 per ounce, yet the pure gold price stayed elevated in the domestic market tracking Kyat’s depreciation against the US dollar in the forex market.
The soaring dollar exchanging at over K4,500 pushed up the pure gold price to a record-high of K3.7 million per tical in late August.
The Ministry of Natural Resources and Environmental Conservation sold three visses of gold ingots each in Yangon and Mandalay under the auction system on 6 October. A viss of gold fetched approximately K2.5 million. Additionally, the minister has been selling gold coins in Yangon, Mandalay and Nay Pyi Taw.
With an aim at reducing gold price, Yangon Region Gold Entrepreneurs Association (YGEA) sold approximately 1,277 ticals of gold bullion supplied by the executive members and the members of the YGEA at K2.5 million per tical on 12 and 13 September.
On 7 October, Mandalay Region Gold Entrepreneurs Association also sold seven visses of gold (seven gold bars) to each individual in a bid to reduce the gold price. A gold bar weighs 10 ticals.
The price of pure gold was K2,540,000 per tical then. Moreover, MGEA continues selling depending on the supply of gold bars by gold refineries, traders, shops and members.
Furthermore, the governor of the Central Bank of Myanmar (CBM) and officials of the Monitoring and Steering Committee on the Gold and Currency Market discussed matters regarding the stability of the gold and currency market and supporting plans of the banks for gold bar transactions to be made with banking system on14 September in Nay Pyi Taw.
Then, on 30 September, the seven private banks opened special counters at the designated 48 branches to offer banking services for gold transactions.
According to CBM’s directive (43/2021) dated 3 November 2021, lump sum payments worth more than K20 million for buying or selling assets have to be processed with the banking system.
The seven private banks are providing banking services by opening special counters at their 48 branches in Yangon and Mandalay regions and Mon State (Mawlamyine) to facilitate gold transactions with the banking payment system.
Those banks are Kanbawza Bank (KBZ Bank), Co-operative Bank (CB Bank) PCL, Ayeyawady (AYA) Bank, Myanmar Apex Bank (MAB), UAB Bank, Yoma Bank and Ayeyawady Farmers Development Bank (A Bank).—NN/GNLM

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