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Central Bank moves to prevent commodity price hike

A US$100 dollar note. The Central Bank of Myanmar is widening access to foreign currencies for fuel and edible oil traders (Photo: US Bureau of Engraving and Printing

The state-owned Central Bank of Myanmar on 17 June announced that it will begin the unrestricted sale of foreign currencies to fuel and edible oil importers, allowing them to continue international trading in the face of an expensive dollar and other currencies, according to state-run media.

The Central Bank Deputy Governor Sett Aung is cited as saying: “There are operators that import fuel and edible oil up to the value of US$300 million per month. Our intention is to facilitate for them the unrestricted sale of foreign currency as they currently have to buy from the [international] market to pay for the monthly imports.”

The decision arose from a meeting on 17 June in Naypyidaw, according to the Burmese-language Myanmar Ahlin newspaper.

“Hikes in foreign currency rates can cause fuel and edible oil prices to skyrocket, leading to jumps in demand and an increase in commodity prices. We are trying to prevent this by facilitating the unrestricted sale of currency required for these imports,” said Sett Aung.

Foreign currencies will be sold to eligible traders by the Central Bank through private financial institutions as of Wednesday, 17 June, state-owned Global New Light of Myanmar reported, while the Myanmar Economic Bank and the Myanmar Investment Bank will implement the plan on 22 June.