DAILY Central Bank of Myanmar currency
auctions may have floated the kyat from April 1 but businesspeople and other
foreign currency holders say the foreign exchange market is still deeply
flawed.
The
Central Bank posts the results of the auctions – participated in by 11 private
banks – on its website every day. On April 24 the Central Bank’s website stated
that US$1 was selling for K821, compared with K814 offered at exchange counters
run by private banks, which itself was slightly higher than the open market.
The
exchange counters were selling dollars for K828 on the same day.
The
April 1 float also abolished the former official rate of K6 to the dollar,
which had been used by the government for decades.
But
foreign currency sellers say little has changed in their day-to-day
interactions with the foreign exchange counters operated by the private banks.
“We are
still finding limitations and difficulties in exchange US dollars for kyat at
foreign currency exchange counters on Theinbyu Road, even though there’s a
daily exchange rate,” said U Myo Naing, an overseas worker who recently
returned to Myanmar.
“I had
to go to six exchange counters run by different private banks to sell $1000,”
said U Myo Naing.
U Soe
Myint, an employee of a domestic NGO, said he visited a number of exchange
counters on April 10 but only two – Myanmar Oriental Bank and Innwa Bank – were
willing to accept Foreign Exchange Certificates (FEC).
“I sold
FEC700 at Innwa Bank’s counter in the morning but when I came back in the
afternoon at 2pm, the counter staff told me that they had stopped buying FEC. I
also tried other counters but none of then would buy,” he said.
U Win
Kyaw, the manager of a trading company, said the auctions were too restricted.
“The
Central Bank of Myanmar is just purchasing foreign currency from authorised
banks and not from other sources. It would be better if the Central Bank
allowed other sources, such as foreign investors and export-import businesses,
to take part as well because the private banks cannot manage the market
properly,” he said.
However,
MRTV-4 on April 25 carried a report quoting a senior official from the Central
Bank of Myanmar as saying that the bank would allow other organisations and
individuals to take part in the currency auctions eventually.
The
currency float is the first step in unifying the many different exchange rates
used in Myanmar, forming a vital part of reforms aimed at stimulating Myanmar’s
moribund economy, state-run newspapers said in early April.
U Win
Kyaw said each currency exchange counter had its own rules, which frustrated
users.
“We are
not buying FEC today and we have also stopped purchasing US dollars since
1:30pm. But if you are buying FEC or US dollars from us, we will sell them
until 3pm,” said a counter staff run by Co-operative Bank.
A
counter staff from Kabawza Bank said on the same day: “We are not buying FEC
today and are buying a maximum of $100 from each customer.”
The
counters also buy and sell euros, Singapore dollars and other currencies,
although US dollars, FEC and kyat are the dominant currencies.
On
April 10, 1 euro was selling for K1070, while S$1 fetched K647.
However,
some wily customers are trading currencies with others users who are refused by
the exchange counters.
“One
day I went to sell some dollars but the staff told me they had stopped buying.
As I was walking out a businessman approached me and offered to buy my dollars
at K815 and I immediately accepted,” said another overseas worker.
Other
customers told The Myanmar Times that the exchange counters have retained
strict rules regarding the acceptance of notes – any imperfections, marks,
folds or nicks and the counters will not take the bills.
And
some black market currency traders are exploiting the demand to change money by
scamming unprepared customers out of their cash.
“I also
had a terrible experience with a money changer at the corner of Maha Bandoola
Garden Street,” said U Win Aung, who works for an NGO.
“I lost
about K50,000 in one exchange because they folded a number of notes to make it
appear that there was more money in each packet than there really was.
“When I
realised that I had been conned I called the police but the changers had
disappeared. After my mishap, I heard from a number of other people who had
been cheated in similar ways but none had managed to recover their money,” he
said.
Aung
Kyi
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