May Thet Hnin
THE dollar is depreciating against the local currency due to the greenback’s depreciating against other currencies on the international market, exporters say.
The dollar exchange rate against the local currency has declined in the market since the second week of this month. The US dollar exchange rate in the domestic market was above Ks1,356 prices per dollar. For the time being, the dollar is valued at between Ks1,345 and Ks1,347.
On 19 January, the buying price of a dollar was Ks1,346, while the selling price reached Ks1,347 per dollar in the world market. The Central Bank of Myanmar set the exchange rate at Ks1,346 per dollar. However, the dollar price calculated for export earnings was Ks1,349. At Kanbawza Bank, the selling price per dollar was Ks1,345 and the buying prices was Ks1,339.
Regarding the exchange rate, Daw Toe Nanda Tin, vice-chairperson of Myanmar Fishery Products Processor and Exporter Association (MFPPEA), said, “The dollar is depreciating against the local currency due to the greenback’s deprecation against other currencies in the international market. There will be no huge impact on the export sector due to a two-digit decline. Traders may be at risk if there is a three-digit decline.”
U Ye Myint Maung, chairman of Myanmar Food and Exporters Association, noted, “Exporters will be able to enjoy the fruit only when the currency exchange rate is stable.”
“The dollar’s depreciation has little effect on us. The reason is because we imported raw materials, with a value of Ks1,360 per dollar, three or four weeks ago, and then exported finished products at around Ks1,345 per dollar. The two-digit decline will have no big impact on exporters. We are not doing it on purpose. We can do nothing due to the greenback’s deprecation in the international market,” he continued.
Exporters experienced financial losses in about 2008, as the value of the dollar dropped to some Ks300 per dollar.
Last year’s dollar exchange rate was higher than that in previous years, while 2016 saw a record high of Ks1,380 per dollar.
The dollar’s depreciation in the international market is linked to factors such as inflation, interest rates, terms of trade, current account and deficits, political stability and economic performance.
International economic websites indicate that the US dollar exchange rate against other currencies has declined slightly. Declining gold prices and falling stock markets are another reason for the greenback’s depreciation.