Fears of further depreciation after Myanmar’s new 20,000 Kyat note announcement
The pubic in Myanmar are worried that the Kyat is further depreciating, after the announcement that a new 20,000 Kyat bank note denomination will be printed, though Myanmar’s Central Bank (CB) reiterates that the notes will only be used to replace old notes and there should be no concern over inflation.
The new note, reportedly only printed as a commemoration issue and limited in supply, doubles the current highest denomination of 10,000 Kyat.
As it was announced on July 23rd, a Sunday, the foreign currency and gold markets were overladen with panicked buyers on Monday, when the market officially opened.
These markets were so shaken that they suspended all trading by mid-day. The price of the dollar opened on Monday a modest 3,300 Kyat per US$ to buy, but closed at 3,500 Kyat per US$ to buy and 3,200 Kyat to sell.
“We have to be very careful, because every time something like this happens and panic sets in, eventually the narrative is that the currency traders are purposely ramping up the prices. It might be true for the big players, but for us normal businesses, it’s just supply and demand. What will happen is that they will catch a few of us and it might keep the prices from climbing past a certain point, but they never go back down to rates before such events, ever,” said a currency trader in Lanmadaw.
The military’s spokesperson General Zaw Min Tun has admitted that the values of dollar, gold and other commodities shot up, but claimed that the price spikes weren’t due to the 20,000 Kyat notes, promising that those notes are not to be put into regular circulation to avoid upward pressure on inflation.
He instead placed the blame on foreign news media, exiled media from Myanmar as well as other “rumour mongers”.
As of July 29th, before market closes, the rates have solidified; 3400-3500 Kyat per US$, which is an increase of 500 Kyats, 2400 Kyat per SGD, which is an increase of around 300 Kyat, and 100 Kyat per Baht, which is an increase of around 20 Kyat.
The special 20,000 Kyat note is, according to the government, to commemorate the birthday of a white elephant and the completion of the Maravijaya Pagoda.
