Myanmar Kyats

Kyat begins new year high

After a long season of inflation, the Myanmar kyat ended 2019 at its highest level for the year. The currency strengthened to 1479 kyat per one US dollar after spending most of the year in the mid 1500s.

A Myanmar Times analysis attributes the bump to new regulations on imports passed on Christmas eve. The report pointed out that Myanmar’s trade deficit dropped from USD 3 billion to 1.1 billion over the 2018-1019 fiscal year. That figure implies that Myanmar people are buying more local goods and therefore using more local currency. U Maung Maung Lay, vice chair of the Federation of Chambers of Commerce and Industry argued that the latest boost for the kyat is due to lower interest in the manufacturing sector, which contains a high level of foreign investment.

In the long term, the strengthening kyat may simply be a bounce-back from an inflation surge in the summer 2018, when the kyat to dollar value rose past the 1500 mark from around 1300. The value of the kyat took another hit in 2019 after rumors of an unpaid debt crisis caused mass withdrawals at local banks and skyrocketing demand for both foreign currencies and gold.

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