The rapid depreciation of Myanmar’s currency is driving up the cost of essential goods, such as food and medicine, putting immense strain on ordinary households in the Southeast Asian country already devastated by civil war and a collapsing economy.
The Myanmar kyat has been extremely volatile in recent days, plunging to a low of 7,500 to the dollar in the black market last week from 5,000 earlier in the month, according to four foreign exchange traders. Two traders said the plunge followed reports that the Myanmar junta was printing more kyat to prop up the currency.
“People are frantically buying (Thai) baht and selling kyat,” said a money transfer agent in neighboring Thailand who asked not to be named.
“The only ones selling baht are those sending money back to Myanmar from Thailand.”
The kyat has since recovered to around 6,000 to the dollar in the black market, while the central bank’s official reference rate was 2,100 on Tuesday, with an online market trading rate of 3,400. However, six residents said prices of essentials have not come down.
They said the kyat’s fall, rising transportation costs, and disruptions in border trade have sent the costs of some medicines and groceries soaring in Myanmar’s main cities in recent weeks.
All six, who include traders, pharmaceutical officials, a doctor, and Myanmar residents, asked not to be named, fearing retribution from the junta.
“It used to cost about 25,000 kyat ($11.94) per week for our household groceries until about a month ago, but now it costs about 40,000 kyat,” said a 27-year-old housewife from Naypyitaw, Myanmar’s capital.
A Myanmar’s military government spokesperson did not respond to calls seeking comment.
Once seen as a promising frontier market, Myanmar has been torn by violence since the military’s 2021 overthrow of an elected government, which triggered an investor exodus, Western sanctions and protests that have grown into a nationwide armed rebellion.
The junta has steadily lost control of vast areas of the country of 55 million people, including key trade routes with China and Thailand, and has struggled to manage the economy.
Poverty in Myanmar is more widespread than at any time in the last six years, and economic growth is likely to remain at 1% in the current fiscal year, the World Bank said in June.
‘No system in place’
At the same time, household incomes have declined – after adjusting for inflation – and unemployment has expanded, the World Bank said in June, underlining growing pressures for large sections of the population.
“It’s chaotic and 100% caused by the regime’s economic policy and decision-making,” said analyst David Mathieson, referring to the rising inflation and other economic woes.
The junta has taken a heavy-handed approach in its attempt to stabilize the currency and the economy.
Since June, it has arrested at least 56 people, including gold traders, foreign exchange dealers, and agents selling foreign real estate, to try and stem the kyat’s slide.
Two grocers said that with the currency plunging, the cost of imported products, including essentials like cooking oil brought in from Thailand, has jumped in recent weeks.
They said a rise in transportation costs due to a shortage of imported fuel, which led to long queues in several parts of the country last week, has further impacted retail prices.
“The price has doubled or tripled due to transportation costs,” said a grocery store owner in Mawlamyine, a city in southern Myanmar, referring to some vegetables.
Two pharmaceutical officials and a doctor said medicines, including blood glucose strips used by diabetes patients, have become between 10% and 30% more expensive in the last month.
Yet, they said, there is limited evidence of the availability of certain medicines due to the impact of ongoing fighting on border trade at inflated prices.
The National Unity Government (NUG), comprising former lawmakers and other junta opponents, said the military has no proper plan to manage the current economic situation.
“They have no system in place and are simply printing more kyats, which is fuelling inflation and creating an economic crisis like we’ve never seen before,” said spokesperson Kyaw Zaw.
