Families surviving on remittances hit by global recession

Mar 19, 2009 (DVB)–Burmese families relying on remittances from overseas relatives have suffered as the global recession has caused an unfavourable exchange rate for foreign currency entering Burma.

A usually weak Burmese kyat has gained strength recently as much of the world has suffered a general devaluation in currency since the onset of the global recession.

This has meant that Burmese nationals, who previously horded foreign currencies due to their comparative stability, were favouring the kyat.

A Burmese national in Bangkok who ran a private money transfer service for Burmese workers abroad said several other firms doing the same business were forced to shut down after the currency market was upset by the recession.

“There used to be about eight different Burmese firms in Bangkok doing the same money transfer business between Burma and Thailand,” he said.

“Now only about three are left as the rest of them had run out of Burmese kyat in their offices in Rangoon due to high demands.

“The problem is, they couldn’t sell out Thai Baht and other foreign currencies they had in their Bangkok offices because the prices for those are too low at the moment to make profit.”

The weakening value of foreign currencies is also hampering the lives of Burmese nationals who work abroad, as they can only send their families comparatively smaller amounts of money in remittances.

“Now 100,000 kyat is worth about 3500 Thai baht and it used to be only about 2500 baht in the past,” said a Burmese woman working in Thailand’s northern capital Chiang Mai.

Most of the private money exchanging businesses in Burma’s border areas had also stopped due to low demand of foreign currencies, said business owners in the border towns.

Khin Maung Nyo, a Burmese economist in Rangoon, said the situation was a regular phenomenon that occurs when demands on foreign currencies are low.

“This is not a strange thing in marketing theory, because of low demand on foreign currencies,” said Khin Maung Nyo.

“Now nobody wants to own US dollars and even those did want to sell them desperately because its value is falling down.”