According to the statistics released by the Central Bank of Myanmar, the State Central Bank purchased $7.5 million in foreign currency auctions during the five days of October, and $266.2 million from January to October 5, 2020.
On October 2, 2020, the State Central Bank announced a foreign exchange bid of $3.7 million. On October 5, it bought another $3.8 million.
From January to July 2020, the monthly trading volume in January 2020 was 39.5 million dollars. $31 .5 million in February; 21 million won in March $16.7 million in May; 39.1 million in June; $31.1 million in July; $35.6 million in August; $44.2 million in September; Between October 1st and 5th, $7.5 million was bought and $2.7 million was resold in April 2020.
In the short term, the exchange rate of foreign currency will rise. On July 24, the State Central Bank announced that it is conducting a foreign exchange bidding process to reduce the large amount of debt and replenish the reserve for foreign use.
The Central Bank of Myanmar’s Foreign Exchange Operation aims to increase the foreign exchange rate in the short term. In order to reduce the huge expenses and to fill up the national reserve for foreign use, the rule-based foreign currency auction is being conducted.
Rules for competitive bidding by the Central Bank of Myanmar; Instructions have been established and the rules, In accordance with the instructions, the three state-owned banks, which are banks that have a business license (Authorized Dealer -AD) that participate in the foreign currency auction, Buying foreign currency with 19 domestic private banks and 13 foreign bank branches; Conducting sales.
The foreign exchange operations of the Central Bank of Myanmar in the short term are the increase in the foreign exchange rate; Comparing the exchange rate of the Burmese kyat and US dollar on a working day with the previous day’s reference exchange rate to reduce the large cost; According to such a comparison, if the percentage of decline in the value of the Myanmar Kyat exceeds the threshold set by the established rules, open a competitive bid to sell foreign currency (US dollar), if the percentage increase in the value of the Myanmar Kyat exceeds the threshold, open a competitive bid to buy a foreign currency (US dollar), to fill the state’s special reserve for foreign use, the average exchange rate of a working day in Myanmar in the last 20 days. Compared to the exchange rate of the US dollar, if the percentage of rapid increase in the value of the currency exceeds the threshold set by the regulations, open a competitive bid to buy foreign currency (US dollars), and the difference between the highest exchange rate announced by the central bank and the lowest exchange rate presented by AD banks in the competitive auction. to buy foreign currency; Offers for sale are purchased by the Central Bank of Myanmar using Refinitiv’s former (Thomson Reuters) auction trading system (Real Time Dealing Platform). Selling.
As mentioned above, the Central Bank of Myanmar’s opening of competitive bidding for foreign currency prices will increase the foreign exchange rate in the short term. It is known that it is being done to reduce the large expenditure and to replenish the reserve for foreign use. The foreign exchange auction being opened by the Central Bank of Myanmar is to keep the exchange rate at a certain rate or not. The State Central Bank has announced that it does not intend to increase or decrease the value of Myanmar Kyat.
