Gold prices hit record high on rising exchange rate
Aung Htay Hlaing/The Myanmar Times
Domestic gold prices are now at their highest levels ever at K10 lakh a tical, according to U Kyaw Win, chair of Myanmar Gold Entrepreneurs Association.
On September 19, the opening price for one tical of high purity gold in Yangon Region was K 1,012,000. That had increased to K 1,018,000 by noon, said U Win Myint, secretary of Yangon Region Gold Entrepreneurs Association. A tical is equivalent to 16.6 grams.
The current gold price is the highest in the country’s history and comes on the back of rising dollar prices compared to the Myanmar kyat, U Kyaw Win said.
The situation is unique to Myanmar. “International gold prices are not increasing but the Myanmar gold price is rising because of the high dollar exchange rate. Domestic gold prices will continue to be volatile as long as the dollar continues appreciating,” he said.
As a result of the high price, domestic gold sales have trickled to a halt. “At present, the supply of gold is high but demand has fallen substantially,” U Win Myint said.
The rise in domestic gold prices, which have been creeping up for about six months now, coincides with the One Stop Service set up by the Ministry of Commerce (MOC) at the Peoples’ Square in Yangon.
Currently, the export of gold is restricted by the MOC. The move was carried out to allow the legal export and import of gold and gold jewelry and accessories.
Legal gold exports are expected to draw more foreign currency into the country and help stabilise the exchange rate. It will also deter illegal trade at the borders and raise tax revenues. The development comes after two years of discussions on ways to legalise gold exports between the Myanmar Gold Entrepreneurs Association and the MOC.
So far though, gold exports have yet to take place. Under the Foreign Exchange Management Law, gold managed by Central Bank will not be included for trade but lower quality gold that is not managed by the Central Bank will be permitted for trade.