An appreciation in the value of Myanmar's currency 'kyat' against the dollar has led to a reduction in the profits of domestic exporters. It has decreased the competitiveness of Myanmar's garment industry.
The value of Myanmar's currency has appreciated from 876 kyat per dollar in March 2011 to 780 kyat per dollar as on June 9, 2011, a rise of 11 percent within just three months.
This has badly hit Myanmar's garment industry which notched US$ 489 million in exports last year.
Myint Soe, President of the Myanmar Garment Manufacturers' Association asserts that if the trend persists, it would compel the foreign operators in Myanmar to shift to other countries.
The Yangon area houses around 135 garment firms with about 70,000 workers. A majority of these firms are foreign-owned.
Besides a general weakening of dollar in the world market, the huge amount of foreign exchange inflows into Myanmar and sale of state assets last year, are the reasons for the swift appreciation of kyat.
Editorial note-Global weakening of US dollar applies equally to all currencies which are market-based. Hence, the trend should be temporary for garment export sector.
Fibre2fashion News Desk - India
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