The Exchange Rate in Myanmar: An Update to January 2012

Abstract:

David Dapice, January 2012

The exchange rate has moved from about 1300 kyat per dollar in 2006-07 to 800 kyat to the dollar in January 2012 while the consumer price index has jumped by over two-thirds. World rice prices in dollars have been generally strong, with Vietnamese five percent broken export prices at $520/ton in December 2011, 78 percent above their 2006/07 average. Wholesale paddy prices in Myanmar have plunged 30 percent in real terms from 2007 to 2012 and 25 percent in just the last year. For a variety of reasons, the paddy price to farmers may have fallen even more. This results in less hiring of landless neighbors, migration out of the village (often to a foreign country), less use of inputs and reduced summer paddy planting. Sharp real price declines in pulses have also been reported, though the exchange rate is only one contributing factor to their low prices. Poor quality pulses due to untimely rains and reduced demand from India also play some role.

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