Economists’ advice on unstable currency exchange rate

Yangon December 30

Local economists said weakening local currency value has an impact on the country’s economy and would result in an increase in basic commodity prices.

U Hla Maung, an economist said: “Greenback appreciation is due to the unbalanced ratio of demand and supply. The main causes are higher trade deficits, rampant black markets and dollar manipulations.”

Dr Aung Kyaw Oo, an economist said: “The government should shift from Free Floating Exchange Rate system to Managed Floating Exchange Rate system. In addition, it needs to crack down on black markets in order to stabilize currency exchange rates and immediately lift the restrictions on the withdrawal of money from foreign bank accounts (at most US$-5000 a day) twice a week so as to ensure the direct transaction between banks and users.”

U Aung Nyunt Pe, an economist from the South East Asia Banks Syndicates said: “The government needs to prioritize foreign investments which will bring huge capitals into the country, check the revolving of capital brought-in, ensure the inflow of money sent back by Myanmar migrant workers via official routes and encourage the infl ow of foreign currencies kept in the Myanmar Foreign Trade Bank and the Myanmar Investment and Commercial Bank, inspect the infl ow of exports and re-exports earnings into the local market during six months and ensure the availability of over US$-4 billion aid promised by international development organizations (the World Bank, the Asian Development and the Japan International Cooperation Agency).”

Bank expert U Than Lwin, ex-chair of the Central Bank of Myanmar said: ‘‘The government needs to lay down a policy of encouraging the extensive use of local currency in services and production sectors, encourage the remittance of local currency with the use of credit cards and reduce some items of imports.”

Dr Hla Maung, retired ambassador and economist said: “The government should allow opening of foreign banks, extending a helping hand to entrepreneurs for mass production, the production of value-added products and increasing exports and providing assistance to agriculture sector and supporting industries in the whole supply chain system. The Ministry of Planning and Finance should lay down short-and long-term plans and strategies for the works, in cooperation with the Ministry of Commerce the Central Bank of Myanmar.”

The Myawady Daily