Quarterly Business Magazine

Forex rates forecast to go down in 2016

Political Stability the key
Posted :
Friday, November 13, 2015

Some businessmen are forecasting that with the imminent arrival of a new administration and political stability, Myanmar Kyats against the US Dollar exchange rate could fall back to around 1,200 Kyats to the Dollar. They have further stated that the current depreciation is the result of [Myanmar's] economic slowdown and increased government expenditures. The unofficial rate went as high as 1,304 Kyats to the dollar, a record high, during mid 2015.

"Many money changers are predicting a fall and since this is the open season when many transactions are being carried out, there shouldn't be anymore hikes unless there are unforeseen circumstances" said U Myo Thura Aye, a rice exporter. 

Economist U Hla Maung also said that with a peaceful transition and subsequent foreign investment flowing in, foreign exchange will be much more available and the Kyat should appreciate.

U Myat Thin Aung, chair of the HlaingTharYar Industrial Zone Management Committee also thinks that with political stability, the real estate sector could mount a comeback.

In domestic markets, Forex rates have been rising since November 6th due to the fall in Gold prices but gradually fell back on the 11th. It now stands at 1,283 Kyats to the Dollar from 1,287 Kyats on November 9th, according to an independent money changer on ShweBonTha street.

Even though the unofficial rate has fallen, the Central Bank rate has been raised to 1,286 Kyats from 1,284 Kyats.

Domestic gold prices, reflecting a fall in world gold prices also fell. The world gold prices were USD 1,092 per Troy Ounce on November 11th. The domestic gold prices went down to 753,000 Kyats per Tical from 762,200 Kyats on November 7th.

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