Although the value of gold is rising on global markets, prices are falling in Myanmar. While gold is selling for around USD 1800 per ounce in the global market, Myanmar’s gold traders are currently selling for around USD 900 (MMK 1.22 million) per tical (approximately USD 1,550 per ounce), a recent report in the Myanmar Times pointed out. The Times cited the rising value of the kyat and the COVID-19 economic downturn (which has inspired gold-holders to liquidate their assets) as reasons for the swing.

In Myanmar, endemic mistrust of the financial sector has led to a thriving gold market. Many people still prefer to hoard their wealth outside the banks, commonly in the form of gold. Thus, gold prices have historically been a barometer of larger economic trends. Last summer, gold prices in Myanmar surged in response to a plunging kyat and rumors of an unpaid debt crisis in the banking sector. Many queued outside banks in order to empty their accounts—and then queued again at local gold shops to convert their cash into a more stable asset. This summer, the narrative is reversed. First, because the COVID-19 lockdown and economic downturn has forced many people to dig into their—often gilded—savings. And second, because of more than USD 2.5 billion in government stimulus measures included in the COVID-19 Economic Stimulus Plan. These include subsidies and safety nets for banks, low-interest loans to businesses, and direct cash payments to individual households. The result has been a stronger kyat (and weaker gold) both in global currency markets and in the minds of Myanmar consumers.