In a bid to curb out-of-control inflation amid increasingly desperate economic conditions, Myanmar’s military-controlled central bank announced an interest rate hike on August 14.
The minimum interest rate for bank deposits will rise from five to seven percent, and the maximum interest rate allowed for loans increased from 10 to 15 percent, according to a statement issued by the Central Bank of Myanmar (CBM).
The CBM, which said that interest rates may vary within a certain range for both deposits and loans, did not specify a maximum rate for deposits. The changes are due to take effect on September 1.
When asked for comment, a finance expert said the consequences from the junta’s action could be dire, predicting that “The entire financial system could potentially collapse.”
“It isn’t that increasing bank deposits is a bad thing,” he elaborated. “It helps reduce. . .
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