Currency prices have also fluctuated as a result of Burma’s political instability, with the US dollar reaching nearly 3,000 kyat on the external market. The World Bank predicts that the dollar shortage will continue in 2022.
The kyat gained value against the US dollar between 2017 and 2019, reaching 1,293 kyat per dollar in October 2020.
The military coup in 2021 caused a sharp depreciation of the kyat. During this time, the exchange rate fluctuated, reaching almost 3,000 kyat on foreign markets and a reference exchange rate of 2,000 kyat in October.
The rate that was set by the central bank was revised to approximately 1,800 at the end of December. Changes in the policy of the central bank can have an impact on exchange rates; According to estimates provided by the World Bank, short-term repercussions could result in additional issues in the near future.
Kim Edwards, the Burma economist for the World Bank, stated: As a result of a sharp decline in private investment and a halt in demand for even potential projects, such as the electricity sector, many indicators have declined significantly. The depreciation of the kyat in foreign currencies has raised the price of imported goods. Additionally, a significant rise in unemployment, accompanied by months of absence; Displacement will eventually deplete human resources. Productivity and skills will suffer significantly.
Social work, political instability, and the military coup for a year; The cash flow issue is getting worse in Myanmar, where health conditions are deteriorating.
Additionally, the domestic financial market is expected to remain unstable, and foreign investment has been steadily rising.
