• KOSPI

    2,471.91 6.34 (+0.26%)
  • KOSDAQ

    869.16 3.80 (-0.44%)
  • Dollar/Won

    1,080.70 4.70 (-0.43%)
증권시황 정보 열기

Interest rates to remain unchanged until 2020: Central Bank

2018.02.01 10:00:37 | 2018.02.01 10:00:55
  • print
  • email
  • facebook
  • twitter
  • share
The Central Bank of Myanmar will not be revising interest rates until 2020 at least.

The Central Bank of Myanmar will not be revising interest rates until 2020 at least.

The Central Bank of Myanmar (CBM) will not revise the interest rates on bank deposits, borrowings and government treasury bonds, CBM Vice-Governor U Soe Thein told the media on Tuesday.

As it must keep inflation stable and maintain the rate at which the government borrows money to fund the fiscal deficit, the CBM has no plans to change existing interest rates until 2020, U Soe Thein said.

“The CBM has a mandate to keep inflation stable and support the government in narrowing the fiscal deficit. So, we will not change or reduce interest rates up until 2020 at least. Beyond that, if conditions are suitable, and these two factors are under control, there may be some relaxation in the rates,” he said.

Currently, the Central Bank Rate is 10 percent per annum (pa). The Minimum Bank Deposit Rate is 8pc pa, while the Maximum Bank Lending Rate is 13pc pa, according to the CBM’s website.

The announcement comes after the January 24 Parliament session during which Pyidaungsu Hluttaw MP Daw Thet Thet Khaing had proposed reducing the deposit rate to 7pc and lending rate to 11pc, saying that lower rates would boost the slowing economy.

“The moment savings, or deposit rates are lowered, people will withdraw their money, which could destabilise inflation again,” U Soe Thein added.

Currently, Myanmar’s inflation rate has stabilised at 4.47pc. That’s down from 6.8pc in 2016-17 and 10pc in 2015-16. According to forecasts made by the ASEAN+3 Macroeconomic Research Office (AMRO), inflation in 2018-19 could rise to 5.5pc.

“Myanmar’s inflation rate has been high because of the trade deficit and budget deficit. And so, it is necessary to sustain the current stabilised inflation rate without bringing about any negative impact,” said U Soe Thein.

For the 2017-18 fiscal year to January 5, Myanmar suffered a trade deficit of $3.2 billion, according to state media. Imports, which totaled $13.9 billion for the period, exceeded exports, which amounted to $10.7 billion. During the 2016-17 fiscal year, the trade deficit was $5.5 billion.

In the meantime, the CBM will be working on deepening the Myanmar sovereign bond market so that local government treasury bonds and treasury bills gain more traction from the market. Once the government is able to fund larger portions of the budget deficit with funds raised from the bond market, pressure on the CBM to lend to the government can be reduced.

The plan is that before 2020, CBM funding of the budget deficit will be reduced from 30pc currently to 10pc.

Currently, the coupon rate on 3-year government treasury bonds is 9.5pc, while the rate for 1-year treasury bills is 7.2pc.

By The Myanmar Times(Published: 31/01/2018)

https://www.mmtimes.com/news/interest-rates-remain-unchanged-until-2020-central-bank.html

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]

ad

weather

  • Seoul Thu 24 May 2018
  • THURS

    14.0℃

Get Newsletters