Officially licensed currency exchange and gold traders have been questioned at the Bureau of Special Investigation (BSI) in Yangon, finding that the price of the US dollar in the black market has risen to around K3,000. Officials stated this is partly due to the closure of money exchange counters.
Given the recent depreciation of the Burmese kyat, the foreign exchange rate in the black market has ranged from more than K2,900 to 3,000 per dollar as of August 1. The exchange rate also depends on buyers and sellers. In addition, the price of a tical of gold has risen up to K23 lakh (US$1,200).
As the value of the kyat crumbles, some money exchange and gold traders have been taken in for questioning by the military since the end of July and have not yet been released, according to their family members.
“Only official currency exchangers were questioned. They took them in for questioning as well as gold traders. We are looking into where they are keeping them,” a family member of an arrested money exchange trader told DVB. “All documents are being checked and we can only attest to what we have been doing legally. We also got into contact with the traders and found out that they are being treated well, but we are unaware why they have not been released yet.”
Various exchanges have temporarily shut down but the price of US dollars continues to soar in the black market.
Travelers going abroad told DVB that the exchange rate at the airport is K1,850 per dollar, the official rate of the junta-controlled Central Bank of Myanmar (CBM), and people are only allowed to exchange up to US$200 at the airport.
Experts pointed out that Burma could be the next Sri Linka if the country’s economic crisis continues to deteriorate.
However, junta spokesperson Zaw Min Tun said at a press conference on July 26 that the junta has an ample supply of foreign currency but did not mention the exact amount. The gold and money exchange traders were arrested following the conference.
A trader said the rise of the value of US dollar and gold is unrelated to the recent arrests. Although official currency exchanges have halted operations due to fears of arrests, the black market has only expanded.
“Now, people want to exchange at any rate and it will not decrease. Only buyers, not sellers, are making transactions. There are a lot of gold traders and they put them on the ground floor of the BSI office and kept the exchange traders on the first floor. I don’t know the exact number. I think they kept them to control the rising exchange rate of the dollar. However, I worry about them since they are being detained for no reason,” a businessman said.
The junta’s attempts to maintain a tight grip on foreign currency has only created a black market, leading to the increasing price of imported products bought with US dollars – such as medicine, food, household products and raw materials as Burma faces a shortage of medicine and other imported products.
Due to CBM’s restrictions on foreign currency, small and medium-sized exporters and importers in the country are struggling to survive and many other businesses have been forced to close.