Although the government has been regulating the markets, pure gold prices have stayed high in the domestic market and Kyat continues depreciating against the US dollar in the local forex market.
The Ministry of Natural Resources and Environmental Conservation announced the sales of gold coins weighing one tical, 0.5 tical and 0.25 tical through state-run media on 2 September. The gold coins can be available every day except for office holidays.
Additionally, the CBM announced on 31 August that it will provide more than US$200 million through the foreign exchange market according to the decision made by the Foreign Exchange Supervisory Committee in order to ease the commodity inflation triggered by fuel price rise.
Nonetheless, the reference price set by YGEA is around K2 million per tical (0.578 ounce or 0.016 kilogramme) yet the gold price climbs up to over K3 million per tical in the market.
Likewise, the CBM’s reference exchange rate against a US dollar is set at K2,100, while a dollar is valued at K3,500 in the unofficial market.
To stabilize the exchange rate, the CBM set the currency trading band at 0.3 per cent for the Kyat to fluctuate between these two specified upper and lower exchange rates for transactions, selling or buying, according to a directive issued by the CBM on 10 August 2022.
Authorized dealers, money changers or nonbank financial institutions are obliged to maintain the exchange rate within the 0.3 per cent trading band for any forms of transactions and foreign remittances. Therefore, all financial institutions including banks and informal money exchanges set a dollar value at K2,100 for buying and K2,106 for selling.
Despite the trading band, the dollar transaction was made with the buying price of K3,400 and the selling price of K3,500 on 12 September.
Last August, a dollar value hit an all-time high of over K4,500 in the grey market and consequently, the pure gold reached a record high of K3.7 million per tical in history.
Consequently, authorities sold dollars at its auction market for the sectors in need, to control the soaring dollar and the outflow of foreign capital.
A total of $443.8 million were sold at an auction rate in 2021 as well.
Last 28 September 2021, a dollar value hit a peak of over K3,000 in the black market, pushing the pure gold up to K2.22 million per tical. — NN/GNLM