By Nyein Nyein
The US dollar against Kyat gained to K1,400 on 15 December in the local forex market as the vaccine development news brightened the global economic forecast. Following the vaccine optimism, hopes for the global economy and trade recovery triggered high global demand for the dollar, U Than Lwin, senior consultant to Kanbawza Bank shared his opinion.
“The US started vaccine rollout. The vaccine is bringing the economy near recovery. Another point is that developed countries are accelerating vaccine development. That’s why the global economy and trade are likely to recover. The traders are buying dollar now. These are the causes of US dollar appreciation,” he explained. A dollar exchange rate stood around K1,324 on 1 December 2020. The rate jumped to K1,400 on 15 December, with a rise of over K70.
When the dollar value remained strong, the Central Bank of Myanmar (CBM) sold 3 million dollars from the state’s foreign reserves on 14 December.
“A too-strong or too-weak dollar is not suitable for the economy. It is one of the responsibilities of the CBM to control the price. The currency intervention is required to steer the own currency value. The rise in dollar value brought benefits to export businesses such as rice, beans and pulses. The farmers can get a fair price, he added.
This year, the exchange rate moved in the range of K1,465-1,493 in January, K1,436-1,465 in February, K1,320-1,445 in March, K1,395-1,440 in April, K1,406-1,426 in May, K1,385-1,412 in June, K1,367-1,410 in July, K1,335-1,390 in August, K1,310-1,355 in September, K1,282-1,315 in October and K1,303-1,330 in November.
Last year, the rates are pegged at K1,508-1,517 in July, K1,510-1,526 in August, K1,527-1,565 in September, K1,528-1,537 in October, K1,510-1,524 in November and K1,485-1,513 in December. On 20 September 2018, the dollar exchange rate hit an all-time high of K1,650 in the local currency market. (Translated by Ei Myat Mon)