During the last week of September, silver exchanges offered 2,700 kyat to the US dollar compared to 1,695 on September 1.
The local currency began to fall immediately after the military launched its coup against the democratically elected government on February 1. When the military-appointed State Board of Directors took control of the country, the kyat was trading at 1,395 kyat to the US dollar, at the end of September, a US dollar cost 2,700 kyat.
Money brokers based in Hpa-an and Thailand’s border with Burma said Karen News they closed shop because of the devaluation of the Kyat.
“We just can’t afford to sell kyat for dollars at this price, I have no choice but to stop trading.”
The World Bank’s forecast last week that Burma’s economy would collapse by 18% in 2021 and its prediction that the country would experience the worst job cuts in the region would combine to increase poverty.
The dire economic situation, the spread of COVID-19, military airstrikes against ethnic villagers, arrest and hunting of civilian protesters, doctors, workers, journalists and politicians by the military junta have ravaged and disabled the country’s infrastructure – agriculture, banking, transport and health care.
A resident of Hpa-an, who runs a grocery store, told Karen News how the mismanagement of the economic situation by the State Administrative Council, appointed by the military, affects daily life.
“People are facing job shortages and less income. Their expenses have decreased because even though their wages have remained the same, the prices of raw materials have increased.
In the past, when commodity prices went up, we could still balance it with our sales. Now, that is no longer the case. No matter how much we sell, there isn’t much profit left. This leaves us with just enough for our basic daily needs, there is no extra money to save.
A stand owner in the Thai-Burma border town of Myawaddy said Karen News this is the worst Kyat downgrade she has ever seen. Stall owners can no longer afford Thai products due to the fall of the Kyat.
“Since the dramatic drop in the value of the Kyat, the price of goods from Thailand has been high. Few of our customers can now afford these items – detergents, shampoos, instant noodles, cooking oil, canned fish and everyday kitchen products. The exchange rate between the kyat and the baht is not stable and this makes it difficult to fix the prices of imported products.
The stand owner said the price of imported staple foods had nearly doubled in recent months and said Karen News, “A liter of cooking oil was worth 1,500 kyat a few weeks ago is worth 2,600 kyat. A bulk pack of instant noodles that we sold for 6,000 kyat has now grown to 10,000 kyat. “
The failing economic system has left people with difficult choices to make. Local fruit vendors explained to Karen News people don’t buy fresh fruit because they spend more on what are considered vital foods – rice, fish sauces, eggs, canned fish, cooking oil, salt, and meat.
A fruit seller in Hpa-an said Karen News.
“We cannot increase the price of our fruit. It is not considered vital like rice or cooking oil. Our prices are the same, but we are seeing very few customers now. Maybe people are now spending their money on what they think are necessary staple foods. “
A betel nut stall owner said that even though he was selling the same amount as before and earning the same amount as before, his dropped profit margin is much lower because he has to buy his raw materials at much higher prices.
“I still manage to earn the same amount of money at the moment, but I earn very little. In the past, I usually earned 30,000 kyat per day and that left me with a profit of almost 12,000 kyat per day. But now I have very little profit left as I have to spend more on the cost of betel nut, betel leaf and other items.