Dollar jumps on rumours

Ah Nge Htwe, Aung Myat Ko

Myanmar Eleven May 15, 2015 1:00 am #block_media{ position:relative; display:block; clear:both; } #tab_photo,#tab_video{ display:inline-block; width:60px; height:auto; padding:3px; position:absolute; top:-25px; left:500px; text-align:center; background-color:#ccc; color:#000; cursor:pointer; z-index:0; } @-moz-document url-prefix() { #tab_photo,#tab_video{ top:-26px; } } #tab_video{ left:564px; } #block_media .tab_media_active{ background-color:#0c3e6f; color:#fff; } #slides_box,.box-vdo-top{ z-index:600; } An alleged rumour is circulating in Yangon that the dollar has strengthened because a private bank has been buying thousands of dollars. As of Tuesday, the exchange rate hit Ks 1,135 per dollar.

"I think the dollar rally is continuing because the private bank that has two alphabetic words in its name has been purchasing dollars," a businessman said.

Within two months, the dollar has jumped from Ks 1,070 to Ks 1,130. The exchange rate on March 11 was Ks 1,070 per dollar and on May 11 it reached Ks 1,130.

Critics say the reason the dollar is strengthening is because the dollar is getting stronger in international financial market, market speculations abound, the real estate market is feeling the crunch and the recent increase in the salary of civil servants and higher import volume.

"Previously, when auto market feels the crunch, people tend to move to real estate market. Investors are also not so keen in the gold market. Now that property prices are falling, people want to keep the dollars. Meanwhile, the imports are high and dollars will be needed. So it looks like speculations are involved. Yesterday, the Central Bank of Myanmar (CBM) warned that it will take action if people are purchasing or selling the dollar higher than its reference exchange rate. The CBM should do something about it," an economist said.

"We have issued a warning to local banks yesterday. The recent strengthening of the dollar is not normal demand and supply. It is a speculation. We have asked banks not to get involved in speculation. We are discussing the matter in Nay Pyi Taw. Perhaps tomorrow or the day after tomorrow, we will announce what we will do resolve this matter," an official from the CBM said.

CB Bank has denied the alleged rumour that the bank was behind the purchase of thousands of dollars. We always follow the rules and regulation under the CBM, said Pe Myint, managing director of the bank.

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