ATM queues form early, often before dawn. People bring plastic chairs or stools, or mats to lie on. As the sun rises, they protect themselves with umbrellas or cuddle up with shade and wait.
Myanmar is in the grip of a cash shortage. Since the army Overthrown The government of Aung San Suu Kyi in February and tens of thousands of people quit their jobs, and banks had set ceilings for withdrawals, causing crowds to gather at branches every day.
The country’s central bank is still not providing banks with enough liquidity to meet demand, according to bankers, foreign observers and businessmen. Most of them spoke to the Financial Times anonymously for fear of angering the regime, which has arrested more than 5,400 people since the coup, according to the Association for the Assistance of Political Prisoners, a human rights organization.
The run on liquidity is one of the clearest signs that Myanmar’s economy and banking system, as they gradually resume work after the post-coup general strike, remain fragile.
“We don’t trust the junta because they don’t show us any confidence,” said Nicky, 19, a writer and medical volunteer who lives in Yangon and asked not to be named. “So we have to give our money back.”
In recent days, Nikki has been taking cash from a family account at KBZ, Myanmar’s largest bank, in frequent installments as the bank limits withdrawals to 200,000 Myanmar kyats ($ 120) per day.
One sign of the seriousness of the problem is the emergence of a parallel market for cash, where one person signs a bank transfer or check for paper money and gives it again at a reduced amount: for example, 9,000 kyats in cash for every 10,000 kyats upon deposit.
“People realize that even if I transfer money to you, it’s nearly impossible to get cash,” one banker told the Financial Times. “So the money is in the bank at a reduced rate.”
KBZ refused an interview request. However, Myanmar’s largest bank said in a written statement that most of its branches “have reopened and are working to support the livelihoods of the people of Myanmar. Most of the staff have returned to work to make sure people are supported with their financial needs.”
Banks, like other private companies, have chosen their words carefully since the coup to avoid angering the military council or the anti-junta camp, which organized The provinces Businesses controlled by the military, or non-military companies that are perceived to pull the line of the military council.
One of the causes of the monetary crisis appears to be a material shortage of banknotes. Giesecke & Devrient, the German company that supplied raw materials and components for the state-owned security printer in Myanmar to produce kyat bills, suspended it in late March. The company said that the stop was in response to “the ongoing violent clashes between the army and the civilian population.”
Lack of staffing in banks and mistrust of the system’s ability to run the economy also appears to play a role.
Labor strikes Paralyzed banking In the weeks after the coup. Bank employees and civil servants, including at the Central Bank of Myanmar, went on strike, forcing many branches to close.
Since April, most banks have reopened, along with factories and other companies. Traffic has picked up in the commercial capital of Yangon, in what some believe indicates a partial recovery of the economy.
However, cash remains scarce. Banks have placed increasingly strict restrictions on ATM withdrawals and introduced token systems to restrict the number of customers making counter transactions.
The central bank has cash reserves on hand, according to bankers and analysts, but it is not providing banks with enough of them to meet demand. “There is some money in circulation, but not a lot,” said a Western diplomat in Yangon.
Many in Myanmar trade kyats for gold or dollars, both of which have reached record prices since the coup.
While the cash shortage has yet to cause a crisis, analysts said protracted problems in securing funds for business and banking could leave smaller banks vulnerable, putting at risk a sector that has long been struggling with bad loans.
“Myanmar’s banking sector has been in crisis since the introduction of new prudential regulations in 2016 and the near-simultaneous collapse of the real estate market,” said historian and author Thant Myint U.
“Since the coup, the banking crisis has intensified due to the strikes in February and March, the hoarding of liquidity at home, the central bank’s inability or unwillingness to provide the necessary liquidity, and the general collapse in confidence.”
In remarks published in the government publication Global New Light of Myanmar, Min Aung Hlaing, the leader of the junta, referred to the rush for cash. He said that the regime is determined to “expose those who keep a large amount of money in its hands.”
Myanmar’s national unity government, set up by Aung San Suu Kyi’s supporters, said the junta only blames itself. “The people of Myanmar do not believe that the Military Council is competent to manage the country’s economy,” Tin Toon NingMinister of Finance in parallel administration.
“We cannot blame them for wanting to ensure that their hard-earned savings do not disappear.”
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