The queue on the ATM is very early, usually before dawn. People carry plastic chairs or stools or cushions to lie down. As the sun rises, they cover themselves with umbrellas or embrace the shadows and wait.
Myanmar is short of cash.Self-military overthrow The government of Aung San Suu Kyi resigned in February. Thousands of people were unemployed. Banks imposed caps on withdrawals, resulting in crowds gathering at branches every day.
Bankers, foreign observers and businessmen stated that the country’s central bank has not yet provided banks with sufficient cash to meet demand. The Human Rights Organization Assisted Political Prisoners Association said that most people were worried that they would anger the regime arrested since the coup, so they spoke to the Financial Times anonymously.
The shortage of cash is one of the most obvious signs, indicating that although Myanmar’s economy and banking system have gradually resumed work after the post-coup strike, they are still fragile.
“We don’t trust the military government because they didn’t give us any trust,” said Nicky, a 19-year-old author and medical volunteer who lives in Yangon and asked not to mention his full name. “So we have to get our money back.”
In recent days, Nicky has been withdrawing cash from the family account of KBZ, Myanmar’s largest bank, because the bank limits daily withdrawals to 200,000 Myanmar Kyats (US$120).
One sign of the seriousness of the problem is the rise of a parallel market for cash, in which a person signs a bank transfer or check in exchange for banknotes offered at a discount in the second second: for example, 9,000 kyats for every 10,000 yuan. Deposit funds in cash in kyats.
A banker told the Financial Times: “People realize that even if you transfer money to you, it’s almost impossible to withdraw cash.” “So the money in the bank is very cheap.”
KBZ declined an interview request. However, Myanmar’s largest bank said in a written statement that most of its branches “have reopened and are operating to support the livelihoods of the people of Myanmar. Most employees return to work to ensure their financial needs are supported.”
Since the coup d’etat, banks, like other private companies, are choosing their wording carefully so as not to anger the already organized military government or anti-junta camp. resist Military-controlled enterprises may be regarded as non-military enterprises dragging the military government line.
The actual shortage of banknotes seems to be one of the reasons for the cash crunch. The German company Giesecke & Devrient provided raw materials and components to Myanmar’s state-owned security printers to produce kyats. The company suspended production in late March. The company stated that the suspension was a response to “continuous violent conflicts between the military and civilians.”
The bank’s staff shortage and lack of confidence in the regime’s ability to manage the economy also seem to play a role.
Work strike Paralyzed bank In the weeks following the coup. Bank employees and civil servants, including the Central Bank of Myanmar, went on strike, forcing many branches to close.
Since April, most banks as well as factories and other businesses have reopened. Traffic in Yangon, the commercial capital, has increased, which some people believe indicates that the economy has partially recovered.
However, hard cash is still tight. Banks have imposed increasingly strict restrictions on ATM withdrawals and introduced a token system to limit the number of customers who conduct over-the-counter transactions.
Bankers and analysts say that the central bank does have cash reserves, but it does not provide banks with enough cash to meet demand. Western diplomats in Yangon said: “There are some funds in circulation, but not many.”
Many people in Myanmar have been exchanging kyats for gold or the U.S. dollar, and both have set record highs since the coup.
Although the cash shortage has not yet caused a crisis, analysts say that the long-term problem of obtaining funds for companies and banks may make smaller banks vulnerable, thereby threatening the industry that has long plagued non-performing loans.
“A writer in history” Thant Myint-U said: “Since the introduction of new prudential regulations in 2016, Myanmar’s banking industry has been in crisis. The real estate market collapsed almost simultaneously.”
“Since the coup, due to the strikes in February and March, the accumulation of domestic cash, the inability or unwillingness of the central bank to provide the required liquidity and the general collapse of confidence, the banking crisis has intensified.”
In a statement published in the government publication “The Global New Light of Myanmar”, the military leader Min Aung Hlaing pointed out that cash is tight. He said that the regime is dedicated to “exposing those who hold large amounts of money.”
The Myanmar National Unity Government, composed of supporters of Aung San Suu Kyi, said the military government can only blame itself. “The Burmese people do not believe that the military government has the ability to manage the country’s economy,” Tiantun NaingThe Minister of Finance of the Parallel Government said.
“We cannot blame them for wanting to ensure that their hard-earned savings will not disappear.”