Tamu trade halted

The Myanmar Times - - Front Page - CHAN MYA HTWE chan­myahtwe@mm­times.com

Myan­mar traders on the In­dian bor­der say an In­dian gov­ern­ment re­call of ru­pee notes is likely to halt trade un­til new cur­rency cir­cu­lates next year.

FOL­LOW­ING a hugely dis­rup­tive de­mon­eti­sa­tion ex­er­cise by the In­dian gov­ern­ment, trade with In­dia at the Tamu bor­der area will only be able to restart next year once new ru­pee notes start to cir­cu­late, ac­cord­ing to the Myan­mar Tamu Bor­der Traders As­so­ci­a­tion.

In­dian Prime Min­is­ter Naren­dra Modi, as part of an ef­fort to stamp out cor­rup­tion and fake cur­rency, an­nounced on Novem­ber 8 that 500 and 1000 ru­pee notes, which ac­count for over 80 per­cent of cash in cir­cu­la­tion within In­dia, would no longer be le­gal ten­der.

As Sa­gaing Re­gion bor­der trade with In­dia is con­ducted us­ing a mix­ture of ru­pee and kyat, the In­dian gov­ern­ment pol­icy also brought busi­ness to a halt, Myan­mar traders said. In­dian traders de­layed pay­ment for goods re­ceived amid the fall­out, and Myan­mar traders hold­ing mil­lions of 500 and 1000 ru­pees notes were left won­der­ing what to do with them.

U Khin Maung Tin, sec­re­tary of the Tamu Bor­der Traders As­so­ci­a­tion, said last week that Myan­mar traders had been left hold­ing around 210 mil­lion ru­pees (US$3.07 mil­lion; K3.95 bil­lion).

Myan­mar traders have since ex­changed al­most all their 500 and 1000 ru­pee notes with In­dian traders near the bor­der for a com­bi­na­tion of kyat and other ru­pee de­nom­i­na­tions, said U Zaw Htay, chair of Nan Phar Lone Mar­ket near the In­dian bor­der in Sa­gaing.

The In­dian gov­ern­ment is al­low­ing its cit­i­zens to ex­change re­called ru­pees notes through banks and other of­fi­cial en­ti­ties like post of­fices un­til the end of De­cem­ber.

But the re­call has left both sides of the In­dian-Myan­mar bor­der short of cash. U Khin Maung Tin said that bor­der trade would only restart once new ru­pee notes start to cir­cu­late.

“We can’t make deals with­out money,” he said. “Cir­cu­la­tion of money is an is­sue across In­dia not just at the bor­der. The In­dian traders have no money to make pur­chases, so trad­ing is ex­pected to re­sume in Jan­uary.”

U Zaw Htay said yes­ter­day that Myan­mar’s Tamu traders had got­ten rid of around 70pc of their ru­pee hold­ings, and that money was still be­ing ex­changed. But traders are ex­chang­ing ru­pee notes at rates far less favourable than in Oc­to­ber.

“Some [Tamu traders] sold their 500 and 1000 notes for 15 to 20 per­cent be­low [the pre­vi­ous] mar­ket price – and even 30pc,” said U Khin Maung Tin.

Traders at Nant Hpa Lon Mar­ket are also ex­chang­ing their ru­pees at be­low mar­ket prices, said U Khin Maung Cho, who is in charge of fi­nance for the mar­ket.

In­dian busi­ness­peo­ple had ar­rived at the bor­der to pur­chase re­called ru­pee notes, but the in­for­mal mar­ket prices at which they bought were far lower than the of­fi­cial Myan­mar Cen­tral Bank rate, he said.

The Cen­tral Bank rate equates to K1906 for 100 ru­pees, but Myan­mar traders were ex­chang­ing 500 and 1000 ru­pee notes at a rate equiv­a­lent to K1600, he said.

The Tamu Bor­der Traders As­so­ci­a­tion sub­mit­ted a re­quest to the lo­cal Min­istry of Com­merce of­fice to help solve the is­sue and help restart trade, U Khin Maung Tin told The Myan­mar Times last week. U Khin Maung Tin also said his as­so­ci­a­tion had con­tacted the In­dian con­sulate in Man­dalay.

Shweta Singh, first sec­re­tary at the In­dian Em­bassy in Yan­gon, told The Myan­mar Times on Novem­ber 29 she was not aware of any as­so­ci­a­tion have called the In­dian em­bassy or Con­sulate. But the em­bassy was “in touch with the Min­istry of Ex­ter­nal Af­fairs in New Delhi to ex­am­ine the is­sue in con­sul­ta­tion with the rel­e­vant Min­istries in In­dia,” she said.

Ms Singh did not re­spond to ques­tions on whether the em­bassy was likely to of­fer as­sis­tance to Myan­mar traders.

– Trans­la­tion by Zar Zar Soe

Photo: EPA

In­dian sup­port­ers of that coun­try’s de­mon­eti­sa­tion pol­icy wear masks show­ing the face of Prime Min­is­ter Naren­dra Modi.

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