TODAY’S HEADLINE: YANGON- Myanmar to accept Thai baht for border trade, eyes using rupee

March 16, 2022 Contributor 0 Comment -junta, currency, dollar, India, military, thailand, TOPICS : Myanmar

Migrant workers from Myanmar fill out information at the Myawaddy border office after passing through border gate at Myawaddy, Myanmar, after leaving Thailand due to the coronavirus disease (COVID-19) outbreak, in this image obtained via social media. (REUTERS/THANT ZIN AUNG)

Reuters Yangon, Myanmar ● Tue, March 15, 2022

Myanmar will start accepting the Thai baht currency for settling border trade transactions and is also looking at a similar plan to use the Indian rupee for such trade, the ministries of information and investment said on Tuesday.

Myanmar’s military-controlled government has already said it would also accept China’s renminbi as an official settlement currency.

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“By reducing dependence on the US dollar, we will mitigate the risk of sudden exchange rate swings due to external geopolitical factors,” the ministries said in a statement, adding the move would help reduce inflation caused by appreciation of the dollar.

The arrangements would also help support economic recovery, the statement said, adding that – even with rising energy prices – Myanmar should record “modest” gross domestic product growth in the fiscal year ending October 2022.

Myanmar’s economy has slumped since the army overthrew an elected government a year ago and launched a bloody crackdown on opponents, with a struggle to impose order amid widespread civil unrest and armed resistance from pro-democracy militias and ethnic minority rebels.

Last year, the Central Bank of Myanmar briefly tried tethering the kyat currency to a reference rate against the dollar after a slump in the exchange rate.

The statement accused opponents of trying to trigger distrust in the banking and financial system and said a weaker kyat last year was “stoked by economic sabotage”.

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Registered merchants along the Thai border with Myanmar could from this month conduct trade based on the kyat-baht exchange rate announced daily by Myanmar’s central bank, said the statement.

Thai and Indian authorities did not immediately respond to a request for comment.

Thailand is Myanmar’s second biggest trading partner behind China.

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Trade in the 2020-2021 fiscal year was worth $5.3 billion, the statement said.

Myanmar’s main exports included gas, metals, pulses, and garments, it said, adding the country mainly imported machinery, transport equipment and manufactured goods from Thailand.