[ad_1]
Queues at ATMs form early, often before dawn. People carry plastic chairs or stools or mats to lean on. When the sun rises higher, they protect themselves with umbrellas or embrace the shade and wait.
Myanmar is within reach of the lack of cash. From the military demolished Aung San Suu Kyi’s government in February and tens of thousands of people left their jobs, banks have placed limits on withdrawals, which has led to crowds gathering in branches every day.
According to bankers, foreign observers and businessmen, the country’s central bank still does not provide banks with enough cash to meet demand. Most spoke to the Financial Times anonymously for fear of angering a regime that has arrested more than 5,400 people since the coup, according to the Political Prisoners Assistance Association, a human rights group.
The fall in cash is one of the clearest signs that Myanmar’s economy and banking system, while gradually resuming work after the general strike that followed the coup, remain fragile.
“We don’t trust the military junta because they don’t show us any trust,” said Nicky, 19, a writer and medical volunteer who lives in Yangon and asked that his full name not be mentioned. “So we have to get our money back.”
In recent days, Nicky has been taking cash from a family account at KBZ, Myanmar’s largest bank, in repeated installments, as the bank limits withdrawals to Myanmar’s 200,000 kyat ($ 120) a day.
A sign of the seriousness of the problem is the rise of a parallel cash market, in which a person signs a bank transfer or check in exchange for paper money provided for a second at a discounted amount: for example , 9,000 kyats in cash for every 10,000 Kyats in deposit.
“People realize that even if money is transferred to you, it’s almost impossible to withdraw cash,” a banker told FT. “So the money in the bank has a discount.”
KBZ declined an interview request. However, Myanmar’s largest bank said in a written statement that most of its branches “have reopened and are operational to support the livelihoods of the people of Myanmar. Most staff are working again to ensure that people have support for their financial needs. ”
Banks, like other private companies, choose their words carefully from the coup to avoid angering either the board or the anti-board camp, which has organized boycotts of companies controlled by the military, or non-military, regarded as towing the Board line.
Myanmar banks have set strict limits on ATM withdrawals © Sai Aung / AFP via Getty Images
The physical lack of banknotes seems to be one of the causes of the cash crisis. Giesecke & Devrient, the German company that supplied raw materials and components to Myanmar’s state security printer for the production of kyat bills, suspended them in late March. The company said the arrest was a reaction to the “ongoing violent clashes between the military and the civilian population.”
The lack of staff in the banks and the lack of faith in the regime’s ability to manage the economy also seem to play an important role.
Workouts paralyzed banking in the weeks following the coup. Bank employees and officials, including the Central Bank of Myanmar, went on strike, forcing many branches to close.
Since April, most banks have reopened, along with factories and other companies. Traffic in the business capital Yangon has risen, with some believing that this indicates a partial revival of the economy.
However, cash remains tight. Banks have put increasingly stringent limits on ATM withdrawals and introduced token systems to restrict the number of customers making counter transactions.
According to bankers and analysts, the central bank has cash reserves at its disposal, but does not provide them with enough banks to meet demand. “There is some money circulating, but little,” a Western diplomat said in Yangon.
Many in Myanmar have exchanged their kyat for gold or dollars, both of which have reached record prices since the coup.
While cash shortages have not yet caused a crisis, analysts said protracted money-making problems for businesses and banks could make smaller banks vulnerable, endangering a struggling sector. for a long time with delinquent loans.
“Myanmar’s banking sector has been in crisis since the introduction of new prudential regulations in 2016 and the almost simultaneous collapse of the real estate market,” said Thant Myint-U, historian and author.
“Since the coup, the banking crisis has intensified due to the February and March strikes, cash grabbing at home, the inability or unwillingness of the central bank to provide the necessary liquidity and a general collapse of confidence “.
In statements published in the government publication Global New Light of Myanmar, Min Aung Hlaing, the leader of the board, noted the cash operation. He said the regime was determined to “expose those who have a lot of money on hand.”
The Government of National Unity of Myanmar, made up of supporters of Aung San Suu Kyi, said the Board was only to blame. “The people of Myanmar do not believe that the Board is competent in the management of the country’s economy,” Tin Tun Naing, said the finance minister of the parallel administration.
“We can’t blame them for wanting to make sure their earned savings don’t go away.”
Twitter: @JohnReedwrites
[ad_2]
Source link
