The Price of the Commemorative Print

1 1
End of July 2023, CBM printed for the first time, 20,000 Kyats notes, in commemoration of the completion of the Mahavijaya Buddha image and one year’s birthday of a rare white elephant. PHOTO: GNLM



End of July 2023, CBM printed for the first time, 20,000 Kyats notes, in commemoration of the completion of the Mahavijaya Buddha image and one year’s birthday of a rare white elephant. CBM specifically stated it was a commemorative print and the printed new notes would only be used in exchange for the current worn-out notes in circulation. Yet a signalling theory was witnessed in action. The market is flushed with news of uncontrolled printing of money, a government losing control of the country and its monetary system, unconstrained rampant potential inflation, businessmen stopping the sale of basic necessities, US$ and gold prices hitting new highs and the general population scrambling for scraps. 100 per cent negatives with an everlasting supply of misinformation in social media and anti-establishment fake news agencies. QED.
Obviously printing money aka quantitative easing, or increasing the money in circulation without changes in economic fundamentals always represents a risk to the economy. There will be potential inflation due to increased money availability, which could lead to a devaluation of Kyats. There are also additional costs of printing and administering the distribution of the new notes, a cost born out of budget by taxpayers. The exporters will benefit and importers will suffer, due to the depreciation of Kyats. The financial services sector also bears the cost, with adjustments to ATMs, CDMs (Cash Deposit Machines) and other vending machines. There is also an immeasurable psychological impact on public confidence and perception of Myanmar Kyats. The eventual economic implications would be determined by the scale of the denomination issued.
The only positives that can come out of new currency print would be to ease currency shortages in specific denominations and address counterfeiting concerns and security measures.
Alas, the government is not increasing the money supply! As yet, NNCP cyber terrorists and their lap dogs keyboard warriors ganged up together to attack the government and its apparent incompetence in the management of the country. What a Deja vu! Just like indiscriminate targeting and boycotting Myanmar companies for apparent association with the military or lynching or carrying out mob justice through the killing of innocent civilians, retirees or civil servants, history has a chance to repeat itself, again and again.
At the time of print, the dollar rate has gone through the roof to nearly 3,600 Kyats (an increase of 25 per cent, from before the announcement of the new note) and domestic gold price has gone up around 20 per cent. The economic fundamentals of Myanmar simply do not support this abrupt change. The government is aiming for a moderate growth this year of four per cent and the fundamentals have not changed to suggest an alteration to this forecast.
Businesses are trying to get back to normal, picking up the pieces. NNCP firebrands are on the retreat. Donations for their terrorist activities are dwindling. After the failure of their reputed lottery and ostensible sale of lands and properties that they do not own (including the land inside the Mandalay palace), they have started another scheme called ‘Spring (online) Bank’ to start defrauding ordinary people, through a collection of deposits.
Projects are restarting, including the large Yoma Central project downtown. Rentals are on the rise with a noticeable increase in demand and viewing of available units. There are those who want the Myanmar government and its people to fail. There was even one diplomat who purposely went to the grave of terrorists and show support for them, within hours of landing in the country. What an ignoramus!
Hence, do not lose heart. The Kyat is in oversold territory right now. The $ and gold prices would fall back. There is no economic theory that supports such fluctuations, other than market manipulation. By getting back to the basics and through hard work, we would get back to our accustomed way of life and be on the growth track in no time.

Share this post
Hot News
Hot News