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US dollar demand rises against weakened kyat

The US dollar is predicted to strengthen further against the kyat. (PHOTO: DVB).

Burmese finance analysts have predicted that the US dollar will continue to strengthen against the kyat until the end of the year, state media reports.

High demand for the foreign currency, much preferred by investors to the kyat, has reportedly led to a shortage of the dollar in the market which in turn has fuelled demand.

The Central Bank of Myanmar (CBM) set its reference foreign exchange rate at 1,210 kyat to the dollar on Wednesday, up from 1,205 the day before and 1,200 on Monday, as it attempts a managed float exchange rate system. The CBM also announced on 15 July that it would ensure greater transparency in its setting of reference exchange rates.

According to The Global New Light of Myanmar, officials from the International Monetary Fund welcomed the move, saying that the managed float will lower inflation pressure and anchor exchange rate expectations.