Depreciation of Myanmar Kyat

Analyzing the depreciation of Myanmar Kyat, although it started with the external impacts, the domestic factors that include, but are not limited to, weak economic fundamentals and structural issues have significant impacts on the exchange rate. Looking at trade, the trade deficit was US$3.8 billion in 2017-18 and it is actually lower than previous years.

In 2016-2017, trade deficit was US$5.2 billion and it was US$5.4 billion in 2015-2016. It is evident that these deficits have had a lot of pressure on the domestic currency.

Second, changes in seasonal foreign currency demands have also had impacts on the exchange rate. Especially during the period from July to December, demands for foreign currency had been usually high.

In order to reduce the trade deficit, to strengthen the domestic economy and to be resilient, and to withstand various impacts, the Union government has been going through various reform processes in cooperation with the private sector stakeholders.

(Excerpt from the report on the current work of the Union government, delivered at the Pyidaungsu Hluttaw on 19 September 2018)

Ref : The Global New Light of Myanmar