Myanmar central bank buys dollars to ‘reduce panic’

(From the Myanmar Times)

The Central Bank has bought over US$40 million dollars from private lenders in just five days to “reduce panic and prevent volatility”, a Central Bank official told The Myanmar Times, while banks this week once again imposed limits on foreign exchange due to volatility.

Private banks started their sudden net transfer of dollars to the Central Bank through the daily auctions on March 4.

Myanmar money changer

Myanmar money changer

Offers to sell have surged and bids have disappeared, resulting in the net transfer of $44.5 million between March 4 and yesterday. Before this month, there had only been one day this year when private banks were net sellers of dollars.

Banks have also put limits on foreign exchange transactions at their downtown branches, tellers told The Myanmar Times. These limits varied widely across banks and the same banks day-to-day.

A teller at a downtown branch of KBZ Bank said on March 9 there was a $100-per-customer limit for foreign exchange across all Yangon branches. An AYA Bank branch and a Myanma Apex Bank branch were both willing to change $500 and a branch of CB Bank had a limit of $1000. A Myawaddy Bank branch currency exchange desk meanwhile had closed due to the volatility.

The Central Bank has met almost all of the private bank demand to unload dollars – $46 million was offered from March 4 to yesterday. A Central Bank official, who asked not to be named, said the regulator was trying to reduce panic, which would arise if private banks were unable to get rid of dollars through the auctions. Read more


Categories: Asia Unhedged, Southeast Asia

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