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Myanmar currency hits record free m
- Subject: Myanmar currency hits record free m
- From: darnott@xxxxxxxxxxx
- Date: Sat, 17 Feb 2001 10:24:00
February 17, 2001; Saturday 10:07 AM Eastern Time
Myanmar currency hits record free market low
DATELINE: YANGON, Myanmar
Myanmar's currency, the kyat, hit a record free market low
Saturday, falling to 503 to one U.S. dollar, dealers said.
The official rate remains at about six kyats to the dollar,
but many business and consumer transactions are based
on the rate quoted on the black market, which is tacitly
tolerated by the government as necessary to carry on business.
The free market rate has slid quickly since the beginning of
the month, when it was 450 to the dollar.
The reasons for the kyat's recent slide were not clear,
although the trend reflected the military government's failure
to boost a sluggish economy. Clashes along the border with
Thailand were also blamed for the latest dip.
The kyat has eased down steadily from 320 to the dollar at
the beginning of 2000, especially after government servants
were given a fivefold pay raise in March.
The drop in the currency's values has made imported goods
dearer. A can of condensed milk which cost 190 kyats one
week ago was now selling for 250 kyats, a container of milk
powder which was 2,050 kyats now costs 2,200 kyats and a
bottle of Thai-made fish-sauce, or nam pla, which used to
cost 230 kyats was now 400 kyats.
Even the value of Foreign Exchange Certificates, or FECs,
a special currency denominated in dollars, has fallen. The
certificates, which traded at 349 kyats to the dollar in December,
were selling for 407 kyats on Friday.
The slide has added to the woes of the military state's
moribund economy, which financial institutions say suffers
serious structural problems, leading to high inflation and a dearth
of foreign investment.
In January, the state-controlled Myanma Ahlin daily said the
public should not worry about the value of the currency
because the nation was self-reliant and had abundant natural
Usually the state press blames rumor mongers and market
manipulators for currency instability.