As a result of the rumours, the dollar has been falling. One month ago, the exchange rate on the illegal market was stable at around 830 kyat per dollar.

‘For the past two days, we heard that the government would officially fix the rate that one dollar to 750 kyat. Since then, the price of the dollar has gradually decreased. I think that they are trying to devalue the Burmese kyat’, a dealer in Tamwe Township told Mizzima.

In reality, the currency market in Burma is relies on the illegal and legal market. Currently, there are more dollar-sellers than buyers, so the dollar price is likely to keep falling, said dealers.

The current official exchange rate set by the Burmese government is 6.3 kyat per one US dollar.

However, economist Khin Maung Nyo said that the real reason why the kyat strengthened versus the dollar was that there were to many US dollars in the currency market.

‘Basic commodity prices did not fall. Some commodity prices are rising. This is abnormal. So, we cannot say that the value of Burmese kyat is increasing. The kyat has become scarce. The government is selling at auctions. So people sold dollars to buy things in auctions. That’s why the Burmese kyat has become scarce’, Khin Maung Nyo said.

The kyat is at its lowest price against the dollar in five years and that is hurting exports and imports, he said.