Myanmar State Counsellor Aung San Suu Kyi conveyed a message through MPs from her party to people not to panic over the current rumours related with the banking and finance industry.

She said these words at a meeting with MPs of the lower house and upper house from her National League for Democracy party from constituencies in Bago Region at President Home in Nay Pyi Taw on Thursday evening. President Win Myint was also present at this meeting.

Lower House MP from Oktwin constituency in Bago Region Cho Cho who was present at this meeting said, “The State Counsellor conveyed the message to people through us. She said that people did not need to panic as these were just rumours and these were wrong facts. She said that what people worried about was impossible.”

The Myanmar Central Bank issued a press statement on September 2 which assures people not to panic over banking industry news but the gold and monetary markets were hit severely with wild fluctuations because of the rumours.

MP Cho Cho said on September 6, “We heard today that TV news would be broadcast today on rumours related with banking industry by explaining what was really happening.”

Famous business tycoon Zaykabar Khin Shwe said in his speech delivered at the founding ceremony of new ‘Myanmar Entrepreneurs Association’ held on August 22 that he shed tears because of his bad business situation and other business people were facing a similar fate.

Khin Shwe said that the banks informed them to repay all loans borrowed from banks by the end of September and otherwise they would be prosecuted for their loan default and then the country’s economy would be in trouble after that.

After this news the rumour related with the banks circulated among the people. Around the same time, opposition MP Maung Myint asked a question in parliament on August 22, if the government could relax the conditions on loans given to SMEs from the current level.

In a related question he also asked a question to the Myanmar Central Bank if they had any plan to settle this current issue through negotiations with business people.

In reply to this question, Central Bank Vice-Chairman Soe Thein said at parliament, “The Central Bank has worked to settle the cases between banks and individual as much as possible and we have also waited for so long so the central bank was not in a position to give more relaxation for settling this issue.”

This reply made by central bank vice-chairman Soe Thein caused more concern among the business people who have to pay back these loans. Then the central bank issued a press release through state-run TV on September 2 at 8 p.m. prime time news which said the reply made by their vice-chairman Soe Thein was not fully compliant with the stance of the central bank and the people do not need to worry about the banking operations.

But on the same day the central bank’s press statement was issued, the price of US dollar was 1,524 kyat and then it jumped to 1,543 on September 6. The exchange rate of the US dollar was appreciated by 20 kyat within four days.

Similarly the price of 24 carat gold was 1,260,000 kyat per tical (about 16 gms) on September 2 and it rose to over 1,300,000 kyat yesterday. The rise of the gold price is said to have been caused by the global gold price rise and banking rumours in Myanmar.

On September 6, another Central Bank Vice-Chairman Soe Min said, “No reason for concerns. Some people are saying that people are withdrawing their money from banks and buying gold in panic. Our banks are dealing with money and our liquidity is very high with trillions of kyats. We have no problem even if the customers withdraw their money from banks.”

He also said that head of state and high ranking cabinet members gave guidance to them to do their best through negotiations and consultations with all stakeholders.

House of People’s Representatives, Banks and Monetary Affairs Development Committee Chairperson Khin Sann Hlaing commented after a meeting with central bank chairman Kyaw Kyaw Maung that the current situation was not out of control and it was just a ripple effect caused by rumours in the banking industry.

“I assume that the rumours are being circulated in expectation to disturb the ongoing work and plans being carried out by the state,” Khin Sann Hlaing added.

A Central Bank report says business people have borrowed over 24,226 billion kyats from state banks, private banks and foreign bank branches as of the end of September 2018