FEC price higher than USD

Wednesday, 06 January 2010 22:00 Salai Han Thar San

New Delhi (Mizzima) - The price of Foreign Exchange Certificates (FEC) is significantly higher than the US dollar today. It is higher by Kyat 15 in the Rangoon foreign exchange market, which is unprecedented.

“The current FEC price is Kyat 1,025 per unit and one US dollar is Kyat 1,010. This is unprecedented in the Burmese market,” a foreign exchange trader in Rangoon, Kyauktada Township, told Mizzima.

In the first week of last month, the FEC price was Kyat 985 and the USD was Kyat 970. The FEC price was at par with the dollar after December 20. Now the FEC price is higher than the dollar.

A fishery products exporter from Rangoon said that the rise of price of the FEC could be due to higher demand in the market.

“I think the price rise of FEC is due to higher demand in the market as the payments for fuel, mobile SIM card and air tickets have to be made in this currency. For this the price of FEC is higher than US greenbacks or else no one will keep this currency which is useless in foreign countries,” he said.

The military regime issues FEC in USD 1, 5, 10 and 20 denominations and guarantees as exchangeable with USD at the same face value. But most of the time, the price of USD is higher than the FEC in the exchange market.

The regime permitted private companies to sell SIM cards for GSM and coastal-use of CDMA telephones in mid-2008 but the Ministry of Communication, Postal and Telegraph ordered them to sell them in FEC.

The United Nations admitted in 2008 that, during its relief operations for Cyclone Nargis victims, they incurred losses worth USD 1.65 million in three months due to the difference in FEC and the USD. In 2008, the price of FEC was lower than USD ranging from Kyat 50 to 300.

The market price of USD in early August 2008 was Kyat 1,215 and the FEC was Kyat 850 per unit.

Foreign Exchange Certificates were issued by the Central Bank of Myanmar (Burma) in 1993, for the convenience of tourists and to enhance foreign exchange earnings.