The Central Bank of Myanmar, under military control since the 2021 coup, has pledged to release $100 million to support struggling importers in purchasing fuel and oil. This move comes as the local currency, the kyat, has plummeted in value against the U.S. dollar, severely impacting the ability of importers to pay for essential fuel shipments.
In recent days, residents of Yangon, the country’s commercial hub, have been queuing overnight at petrol stations in desperate attempts to secure fuel for their vehicles. The shortage has also affected businesses and hospitals that rely on generators during frequent power outages in the city, which is home to around eight million people.
The Central Bank issued a statement on Wednesday confirming the planned release of funds to the fuel oil sector through the foreign currency market. However, the statement did not specify when the funds would be made available or the exchange rate that would be applied.
Currently, the official exchange rate set by the junta is 2,100 kyat to the dollar, while the black-market rate is significantly higher at around 6,500 kyat per dollar. The ongoing economic downturn, triggered by the coup and the subsequent crackdown on pro-democracy protests, has led to widespread inflation, with the cost of essential goods like cooking oil, rice, and other staples skyrocketing.
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In response to the worsening fuel situation, the junta launched a crackdown on fuel hoarding last December, threatening imprisonment for anyone found with more than 180 liters of petrol without a license. Despite these efforts, the kyat continues to depreciate, and last month the central bank injected over $16 million into the foreign exchange market in an attempt to stabilize the currency.
The Asian Development Bank has projected that Myanmar’s inflation rate could reach around 15.5 percent for the fiscal year ending next March. The new $100 million injection is seen as a critical measure to prevent further economic deterioration, but the impact on the country’s ongoing fuel crisis remains to be seen.
