Friday, June 17, 2011

Lower US Dollar Value Hits Rice Business and Farmers


Thursday, June 16, 2011
Sales of rice have declined in Burma as exporters, including the military-owned Union of Myanmar Economic Holdings Ltd (UMEHL), have stopped buying from domestic traders following a drop in the value of their overseas earnings, according to business sources.
With the US dollar recently reaching as low as 750 kyat, down from around 1,000 kyat last year, exporters have been reluctant to convert their earnings back into the Burmese currency.
Although licensed trading companies in Burma enjoy a preferential exchange rate, currently around 800 kyat to the dollar, this has done little to offset the overall decline of the dollar against the kyat, the currency used for purchasing rice and other domestic products.
Further complicating matters is the fact that foreign currency transactions are illegal in Burma, although trading companies sometimes informally use dollars, euros and Japanese yen when doing business with each other.



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