Labourers and export-dependent Burmese have been thrown into panic as the US dollar continues to nosedive against the Burmese kyat.
Until recently hovering at around 860 kyat to the dollar, a general weakening of the US currency has combined with attempts by the Burmese government to spur growth to pull it down to 750.
This has meant a sizeable cross-section of Burmese society, including dollar-earning labourers and exporters, is losing money upon conversion back into kyat.
“If the dropping of the US dollar rate is normal, then prices of foreign imported goods should drop too,” said Dr Maw Than, a former professor at the Rangoon Institute of Economics.
He warned that farmers may also suffer the ripple-effect of falling exports, particularly rice, that could come about as a result of profits that decrease in line with the weakening dollar. This could resonate out to other sectors.
Around 60 percent of the Burmese population is reliant on agriculture, primarily paddy, for their chief source of income. A significant number of labourers who already earn meagre wages will also be affected.
Despite the government officially fixing the exchange rate at six kyat to the dollar, the widespread panic about the strengthening unofficial kyat signals how much of the Burmese economy is reliant on the black market rate.
Maw Than said that few Burmese take into account the official rate, which critics of the government have suggested is used to obscure the vast sums of money that are siphoned out of the state budget by Burma’s leaders and placed in overseas accounts.
He added however that despite speculation over the dollar’s continuing decline, Burma had seen the exchange rate as low as 300 kyat a decade ago so people “shouldn’t be too panicked about it”.