State-owned news media have announced that new bank notes for the Kyat, the official currency of Myanmar, will be printed.
The new note will be a 20,000 Kyat denomination and will be 15cm x 7cm. The colour will reportedly be light green and it will enter circulation by the end of July.
Currently, the lowest denomination bank note is 50 Kyats and the highest is 10,000 Kyat.
According to the state-owned news agency, the new note is to commemorate the end of the construction for the Maravijaya “Buddha Park” and the bust of Buddha, as well as to celebrate the first birthday of the white elephant.
The announcement also said that old and damaged notes will be replaced from the beginning of August, with the distribution of the new 20,000 Kyat note starting in Naypyidaw, Yangon and Mandalay.
As the new bank note is double the current highest denomination, fears of hyperinflation are growing.
The potential impacts of the new notes was widely discussed on social media and it is widely believed that it will be hugely detrimental to the value of the Kyat, with many already speculating that, by Monday, the US Dollar to Kyat rate will open at a floor of 3,500 Kyats per US Dollar.
Since the announcement, the Central Bank of Myanmar’s Director General U Aung Aung posted on his social media page that this new bank note is only a “Commemorative Note”, to be exchanged only after old notes were returned. There will be a listing of old notes returned and said notes will be destroyed. As such, this new note will not affect the volume or value of currency in circulation.
He also claimed that an individual can only exchange current bank notes for a maximum of 3 of the new 20,000 Kyat notes and only at exchange counters in Yangon, Mandalay and Naypyidaw.
The value of Myanmar’s official currency has been slowly depreciating since the 2021 coup.
As more sanctions are imposed, international companies continue to leave the country, while FDI and other financial support have started to dwindle and the current military-led government is finding it increasingly difficult to handle its budget deficit, while spending increasing amounts on fighting anti-military groups across Myanmar.
