Oct 1 (Businesshala) – As Myanmar’s economic slowdown deepens after a February military coup and the freezing of parts of its financial system, many in the conflict-torn country are trying to bypass official channels to trade currencies. Turning to online groups.
The fragility of the financial system was exposed this week when the kyat currency hit new lows here after the central bank abandoned efforts to support it. In the turmoil that followed, many licensed currency exchanges and gold shops closed their doors.
Online groups, which run primarily on Facebook, have become a way for buyers and sellers of currencies to connect, often relying on trust when arranging for the physical exchange of notes.
“I posted some old notes yesterday for the group to sell,” said Yangon resident May Le.
“I have lost my job and have not had any income recently. Life is tough with a one-year-old,” she said, noting how her household expenditure on food had doubled.
In the months immediately following the February 1 coup, there were long queues of people to withdraw cash from banks, although recently Kyat savings have taken a big hit, with the dollar losing 60% of its value against the dollar in September.
Speaking after the World Bank warned this week that the economy could shrink by 18% this year, ruling military council spokesman Zaw Min Tun said on Thursday that the central bank here was unable to meet local demand for the dollar. Is.
One of the largest groups set up on Facebook called “Dollar Buyer Seller Direct” had about 170,000 members, with the group’s administrator warning users to be careful before making a deal.
“The seller, the buyer, both take responsibility,” it warned.
The group appears to have been taken down in recent days, although at least one other site has emerged to fill its place.
In Myanmar, money traders must get a license to operate. Central bank officials did not respond to requests for comment.
Asked about such sites using its platform, Rafael Frankel, Facebook Asia Pacific’s Director of Public Policy Emerging Countries, said: “Our dedicated team, including regional experts, continues to monitor the situation in Myanmar in real time. And we’ll take action on anything. It violates our policies as soon as we become aware of it.”
“Our thoughts are with the people of Myanmar at this difficult time,” Frankel said.
Nevertheless, some currency changers have ceased operating and official exchange rates that now correspond to market rates have attracted more people to online sites to make their own deals, which are concluded in person. .
“It’s like a black market. Both sides will have to worry until the deal is done,” said Ye Yint Tun, 33, who became an informal currency broker after losing his job as a real estate agent for immigrants .
Initially demanding a fee of 20%, he has now reduced it to 2% to make it more attractive and based on recent exchange rates he charges around 10,000 to 20,000 pests per day, or Earns around $4 to more than $8.
“There is a risk that you will be robbed when you exchange. So, we have to be very careful.”
Online groups also tap into the flow of money sent by foreign workers to neighboring countries such as Thailand.
“Millions of dollars are being smuggled from Thailand to Myanmar every day,” said an unlicensed money trader based in Thailand, noting that nearly four million Myanmar workers in Thailand need to send money back to family members. Is.
“We use Facebook as our platform to sell money,” said the trader, who declined to be named.
Myanmar workers in Thailand pay traders with their Thai baht earnings, who in turn pass on to family members in Myanmar and use the baht to buy US dollars.
Another Thai-based trader described how US dollars were smuggled into Myanmar, sometimes hidden in clothing or household items.
“In September alone, I traded about 30 million baht ($890,000). Business is much higher than in previous months,” said the trader. ($1 = 33.7800 baht) (by Businesshala Staff Writing by Ed Davis Editing by Robert Birsel) Reporting)