Burma: The risk of shortage of funds due to the coup

Yangon | At dawn, many people queued outside their Yangon banking branch in the hope that they would be able to withdraw their savings, as strict restrictions were imposed on withdrawals, sparking rumors of cash shortages after the coup in Burma.

Mayawadi Bank, which is controlled by the Burmese military, has been back in power since 1is being February, after civilian Prime Minister Aung San Suu Kyi was sacked, he faces a boycott threat from Burmese.

In the mass protests of the past few days, calls were directed at bank employees asking them to stop work.

In fact, most banks, including private banks, have remained closed for several days, and their employees have joined the civil disobedience movement. The situation has become tense as payday approaches in Burma on Friday.

A few public bank branches are still open in Yangon, which allows for funds to be withdrawn but in a very limited manner.

Due to this uncertainty, Ton Ning, a 43-year-old businessman, queues in front of Maiwadi Bank every day. “Because of the rumors about this bank, I came to withdraw my money,” he told France Presse, about $ 4,500.

– ‘High political risk’ –

The sixth largest bank in the country, Myawaddy only allows 200 customers per branch to make withdrawals limited to 500,000 kyats per day, or about $ 370.

Getting a place in the early morning is crucial, “some people stay in nearby hotels to queue up early to get the icons,” says Tonning.

Others are not so lucky.

Myint Myint, the retired 64-year-old professor, has been in line every day for a week but still unable to pull out.

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“I’m really tired,” he told AFP. “They should declare through (government media) that our money is safe … Although my savings are not huge, I am concerned about rumors.”

However, a notice published in the official publication “New Light of Myanmar” confirms that banks are still providing daily services. The opinion issued by the Central Bank stated that “residents are encouraged to participate in this process to ensure the country’s economic stability.”

The Burmese economy was already facing headwinds linked to the coronavirus and containment measures before the coup.

The generals are now facing sanctions from the United States, Britain, Canada and the European Union, and the economy as a whole is also at risk of diminishing foreign investment and reluctance to work with the dictatorship.

Ratings agency Fitch quickly revised its 2021 growth estimate from 5.6% to 2%, citing “high political risk.”

A potential gap in foreign currency flows has raised the alarm of the non-governmental organization Justice for Myanmar, which says generals may start drawing in reserves from Burmese central bank, worth € 6.7 billion.

So far, US sanctions have included a $ 1 billion asset freeze.

“If foreign banks continue to deal with these banks controlled by the military, they will be complicit in the military system,” says Justice for Myanmar.

“I already have enough difficulties like this.”

In reality, the concerns are more urgent: Will companies be able to pay their employees’ salaries at the end of the month, and will the elderly be able to collect their pensions?

The protests do not appear to be diminishing with tens of thousands of people taking to the streets every day.

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Ayi, 85, is hesitant to withdraw her pension at this time until the situation calms down.

“I’m going to get it next month,” she told AFP, although she will need money to survive. “I already have enough difficulties like this. As I get older, I only feel anxious today.”

On Tuesday in front of the Maiwadi Bank branch, a security guard tried to calm a small crowd by himself, demanding to withdraw their savings.

He explained to them that companies have priority in withdrawing money so that they can pay their employees’ salaries.

“We will resume cash withdrawals as soon as these companies withdraw,” he announced on the bank’s doors, which prevents customers from entering.

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