US dollar weakening despite CBM one week purchase of over $15 mln

By Nyein Nyein
The US dollar against Kyat keeps depreciating although the Central Bank of Myanmar (CBM) purchased over US$15 million at an auction rate within a week, the local forex market data showed. The CBM reportedly purchased $3.7 million on 2 October, $3.8 million each on 5, 6 and 7 October. The US dollar exchange rate stood at K1,295 on 7 October despite the CBM’s purchase.
“The instability in the exchange rate posed difficulties to those stakeholders engaged in the agriculture and livestock supply chains including farmers, traders and exporters. That is why the stable exchange rate is of vital importance for the businesses,” the businesspersons pointed out. At present, the local forex market sees the weak sentiment amid the coronavirus outbreak and the trade disputes between the US and China, business experts shared their opinions. Additionally, the CBM also bought $44.2 million in the auction market last month (September), the CBM’s data indicated.
The CBM’s move is aimed at governing the market volatility and supporting the state’s foreign exchange reserves, the CBM stated on 24 July. 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 and K1,310-1,355 in September. 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)

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