China's Central bank cut its benchmark lending rate Tuesday after stock prices in Shanghai plunged another 7.6 percent, closing below the 3,000 mark at an eight-month low. Despite the steady slide in Chinese stock prices, however, other world markets began to reverse the steep declines they suffered earlier this week.
The People's Bank of China said its interest rate for one-year loans would be reduced Wednesday by 25 basis points, to 4.6 percent - the fifth cut since November. Interest paid on one-year deposits will fall by an equal amount, to 1.75 percent.
RANGOON — As the kyat continues its eight-month slide against foreign currencies, the Central Bank of Myanmar will soon set down punishments against businesses charging in US dollars, according to official sources.
In May, the Central Bank halved US dollar withdrawal limits and warned local businesses to cease pricing in the greenback. The admonition appears to have been unheeded by companies catering to foreign nationals, including numerous international schools, upscale restaurants and a swathe of hotel and tourism operators.
In the last week, local franchises of the US-based ice cream restaurant Swensen’s and Thailand’s The Pizza Company began pricing their menus in US dollars.
Win Thaw, deputy director general of the Central Bank’s Foreign Exchange Management Department told local media this week that measures to prohibit the use of dollar transactions for local services would be announced before the end of the year.
Dr Maung Maung Lay, vice chairman of Union of Myanmar Federation of Chambers of Commerce and Industry, said the Central Bank needed to intervene urgently to prevent the progressive dollarization of Burma’s economy, which he said was exacerbating the kyat’s fall in value.
“Other countries practice this custom and so should we: the kyat should be the only currency we accept,” he said. “The Central Bank has already announced that businesses dealing in foreign currency would have to accept kyats. This should already be in practice, but we have a weak enforcement environment.”
Central Bank officials refused to discuss details of what actions will be taken against businesses dealing in dollars. It is believed that senior figures within the bank have canvassed the introduction of fines for offending companies and other penalties for repeated non-compliance.
Recent interventions into the local currency market by the Central Bank have had limited effect on the kyat’s depreciation, which has been largely driven by a ballooning trade deficit. In turn, said Ministry of Commerce senior economist Dr Maung Aung, the flight into US dollars by worried locals was intensifying the kyat’s volatility.
“If government wants the value of the kyat to be stable, they will still have to address dollarization and local currency speculators,” he told The Irrawaddy.
Dr Aung Myat Kyaw, the chairman of the Union of Myanmar Travel Association, said that Burmese businesses were only trading in dollars because of uncertainty around the trajectory of the local currency.
“We can accept kyats instead of the dollar but we need a stable kyat value in the market,” he said.
The kyat was trading at 1310 to the dollar on the streets of Rangoon last week, before stabilizing between 1280 and 1290 in the days since.
RANGOON—Burma’s National League for Democracy (NLD) and the country’s popular 88 Generation activist group have announced they will collaborate to monitor the Nov. 8 election, in order to ensure accurate voter lists and prevent electoral fraud.
The joint statement, released on Monday, follows the NLD’s rejection of most candidates submitted by the 88 Generation Peace and Open Society to contest the election under the opposition party’s banner. The groups said that their cooperation would also extend to future constitutional amendment campaigns and the building of a democratic federal union in partnership with the country’s ethnic minorities.
The statement also urged eligible voters to ensure their names were included on voter lists prepared by the Union Election Commission.
The two groups collaborated last year on a petition drive urging the Union Parliament to reform several provisions in Burma’s 2008 Constitution, including articles that barred NLD leader Aung San Suu Kyi from the presidency and guaranteed a 25 percent allocation of parliamentary seats to the military. The petition campaign eventually attracted over five million signatures, around 10 percent of the country’s population.
Earlier this year, 17 members of the 88 Generation group submitted applications for candidacy with the NLD. Only one of the nominees was chosen, while the opposition became the target of heated criticism for excluding a number of other prominent candidates and ignoring the wishes of numerous township NLD offices.
“We are choosing the most suitable MPs for the country. Everyone has the right to apply as candidates but the [central executive] committee needs to choose the best people,” party spokesman Nyan Win told Reuters at the time.
Ko Ko Gyi, one of the 88 Generation’s leaders and one of the most prominent exclusions from the NLD’s candidate list, told The Irrawaddy on Aug. 7 that he would set up his own political party to compete in future elections.
RANGOON — A civilian was fatally shot in an altercation with a soldier near Nentein village on the road linking Mogaung and Hpakant in Kachin State over the weekend.
Burma Army personnel providing security on the road were directing vehicles in an attempt to alleviate traffic congestion along the route on Saturday afternoon when the victim attempted to bypass the queuing vehicles, provoking a confrontation between the man and a soldier on duty. According to a police officer from Lone Khin police station, the driver was killed when the soldier drew his firearm, which unintentionally discharged.
“We have filed a case against the soldier with the charge of negligent homicide. And now we are investigating the drivers and military men who were present at the scene,” the police officer told The Irrawaddy on condition of anonymity.
Lwin Maung Maung, a relative of the 22-year-old victim Yadanar Tun, said other drivers who witnessed the incident told him that the soldier was a lance corporal from No. 421 Light Infantry Battalion who first punched the victim. When the victim attempted to fight back, the lance corporal shot him, Lwin Maung Maung said witnesses told him.
“I heard that police are still holding in custody a driver and a bus conductor who witnessed the crime for fear that the information might leak out,” Lwin Maung Maung told The Irrawaddy.
A funeral service for the victim was held on Monday. Lwin Maung Maung also claimed that police seized mobile phones from passersby who had taken photos or video of the crime scene.
A truck driver who plies the Mogaung-Hpakant road questioned the soldier’s conduct in firing a fatal shot at an unarmed civilian.
“It was a fight between a civilian and a soldier, and [the soldier] should not have taken it that far,” he told The Irrawaddy on condition of anonymity. “There are many parts of the body that can be shot—arms and thighs can be shot. They [such gunshot wounds] can be treated.”
RANGOON — The Central Bank of Myanmar pledged Tuesday to assist private banks that may run into financial difficulties, looking to address recent speculation that some financial institutions were heading for a crash due in part to the recent depreciation of the kyat.
Central Bank officials held a meeting with representatives from several private banks on Monday before declaring in a statement Tuesday that reports of the latter’s collective slide, including Kanbawza (KBZ) Bank and the Tay Za-founded Asia Green Development (AGD) Bank, were baseless.
Sett Aung, deputy governor of the Central Bank, told the state run Myanma Alin newspaper on Tuesday that the Central Bank would provide financial support to private banks that faced serious difficulties, according to regulations.
“All private banks are working as normal and following the rules of the Central Bank,” he was quoted as saying. “We discussed on Monday that the value of the Myanmar kyat is stable at the moment.”
Last week’s dramatic ouster of ruling party chairman Shwe Mann not only sent shockwaves through political circles, but also triggered concerns over concomitant economy instability, industry sources said.
Nyo Myint, senior managing director of KBZ Group of Companies, told The Irrawaddy that the firm had received enquiries from regular clients requesting advice, including on whether they should withdraw their savings, apparently responding to rumored financial strain on top private banks.
“Some withdrew money but only small amounts. Even if all customers wanted to withdraw their money, we could manage it because we have other businesses to support the bank. But as you know, these were just rumors,” Nyo Myint said.
“Even if some private banks endure a financial crisis, the Central Bank has back-up money, so cases of bankruptcy will not happen like in 2003,” Nyo Myint said, adding that rumors were spread by groups who wanted to take advantage of the recent shakeup of Burma’s ruling party.
Chit Khine, chairman of Myanmar Apex Bank, said that since general awareness of Burma’s banking sector was lacking, falsehoods were more likely to take hold.
“People believe whatever rumors come out… because of their [low] knowledge of the banking system. The Central Bank is always behind private banks, that’s why they don’t need to worry,” he said.
Chit Khine cited uncertainty within Union Solidarity and Development Party ranks, coupled with Burma’s weak currency, as giving weight to recent speculation over the state of private banks.
Severe flooding across much of Burma is also expected to hit the local economy, giving traders further cause for unease, with the country’s agricultural export revenues likely to see a massive drop as authorities impose export controls on much-needed supplies of rice and other staple crops.
The value of the Burmese kyat against the US dollar remains weak after a steady slide since May. To address growing demand for the dollar, the Central Bank has attempted to lessen reliance on black market currency trading by selling US dollars to private exchange counters.
Dollars, “must be sold to importers, who are the clients of banks,” Sett Aung told Myanma Alin. “We require [private] banks to sell 80 percent of dollars that they have bought from our Central Bank to importers. If they don’t, we won’t sell them dollars [again].”
Sett Aung also insisted the country’s monetary situation was equally impacted by external factors.
“The fluctuations in dollar value on the international market coincide with what has happened in our country. In my view, it may be related to the devaluation of the Chinese Yuan,” he said.
RANGOON — Burma’s Union Parliament has approved two bills that place restrictions on religious conversion and polygamy, the last of four controversial bills concerning race and religion to have sped through the legislature since late last year.
Couched within a page-two brief about suspension of the current Upper House parliamentary session, the Global New Light of Myanmar reported on Thursday that the conversion bill had been passed by the Lower House. Burmese-language state newspaper The Mirror simultaneously reported that no amendments had been made to the draft approved by the Upper House in February, indicating de facto passage.
Endorsement of the monogamy bill by both houses was also referenced in consecutive editions of state media this week, garnering little fanfare.
Lawmakers confirmed that both bills had been passed by the bicameral Parliament and now await only the approval of President Thein Sein. Article 95(a) of the Constitution stipulates that once a bill has been passed by both houses it is deemed to be approved by the Union legislature.
The religious conversion bill and the monogamy bill are the last of four that make up a legislative package known as the “Race and Religion Protection bills,” which were first put forth by the powerful Buddhist nationalist group Ma Ba Tha in mid-2013 and reached Parliament late last year.
Two new pieces of legislation restricting interfaith marriage and allowing local government to impose birthrate limits have already been signed into law, drawing harsh criticism from the international community. Critics claim the laws could violate women’s rights and risk being used to target minorities.
Drafts of both bills passed this week were published by state media in December, and are likely to have since undergone minor modifications. The monogamy bill would ban polygamy and extramarital affairs while the conversion bill would establish new legal procedures for changing one’s faith, according to the drafts made public last year.
The most recent published version of the conversion bill required those wishing to convert to obtain a certificate from a local “registration body,” which is authorized to question the applicant and determine whether the conversion was voluntary or coercive.
The bill has come under scrutiny both in Burma and abroad for its susceptibility to abuse by local authorities. Burma is a vast and diverse country with a long history of religious persecution, particularly by the Buddhist majority against Christian and Muslim minorities.
The international community has issued several warnings that the proposed laws run afoul of international norms and could violate Burma’s treaty commitments. UN human rights envoy Yanghee Lee remarked earlier this month that “the package of four race and religious bills clearly violate [international] norms.”
David Mathieson, senior Burma researcher for Human Rights Watch, warned on Thursday that the conversion bill, as per the latest version made public, was “potentially dangerous” and “could be used to further inflame religious violence.”
Deadly bouts of violence between Buddhists and Muslims, most prominently the stateless Rohingya minority in western Burma, have plagued the country since mid-2012, leaving some communities completely segregated and tensions high.
Parliament resumed on Tuesday amid political fallout from a sudden purge in leadership of the ruling Union Solidarity and Development Party (USDP). Lawmakers had previously stated that swift passage of the so-called “protection bills” would be high on the agenda.
Burma’s Upper House announced on Wednesday that it would suspend its current session, the last before a general election to be held in November. Lawmakers are still expected to meet for joint sessions, as is the case on Thursday, to resolve outstanding legislation ahead of the polls.
Additional reporting contributed by Zarni Mann and Kyaw Phyo Tha.
Thailand has asked Interpol for help in tracking down the man they believe planted a bomb in Bangkok that killed 20 people, sending the international police organization an image of the suspected bomber.
The military government was initially reluctant in asking for outside help in the investigation of the blast at a famous shrine on Monday evening that killed 20 people and wounded scores.
“We sent a request for assistance,” deputy national police spokesman Kissana Phathancharoen told Reuters.
There has been no claim of responsibility and police have not determined a motive for the worst ever bomb attack in Thailand.
Police suspect the young man caught in grainy footage leaving a backpack at the crowded shrine shortly before the explosion is foreign but Kissana said Thai police were not focused on any particular country or region with their appeal to Interpol.
“We basically sent in the modus operandi [of the suspect] and also the appearance of the suspect we’re looking for,” Kissana added.
The Erawan shrine at a main city-centre intersection is popular with tourists from China and other East Asian countries. About half the victims were foreigners.
The government says the attack was aimed at undermining Thailand’s economy.
Prime Minister Prayuth Chan-ocha initially said the attack was Thailand’s problem and should be resolved internally.
Police have issued an arrest warrant for an “unidentified foreign man” in a yellow shirt seen in the video footage and have said investigators believe two other men seen on the footage were accomplices.
“We are confident at least three people were involved in this, but maybe more,” Kissana said.
Checks at airports and other exit points found that no one matching the description of the main suspect had left the country since the attack, he said.
On Tuesday, a small explosive device was thrown at a busy pier on Bangkok’s main river but no-one was hurt. Police have not ruled out a link.
The Erawan shrine, which is popular with Buddhists in Thailand, has since reopened.