Myanmar junta detains gold traders for ‘unlicensed transactions’

Myanmar’s military regime arrested five gold traders and shut down seven shops and other businesses on Tuesday for allegedly engaging in unauthorised transactions, according to the country’s junta-controlled central bank. In a statement released on the day of the arrests, the Central Bank of Myanmar said that action was taken against the traders for “violation of rules and regulations of the gold trade,” including making unlicensed transactions. The statement said the move came after the bank’s monitoring and steering committee on the gold and currency market carried out investigations targeting gold traders in Yangon and Mandalay, Myanmar’s two largest cities. All five of the detained gold traders were taken into custody in Yangon, according to the statement. The arrests had an immediate chilling effect on gold businesses in the city, according to a local goldsmith, who said the action was likely taken to stem the recent rapid rise in the price of the precious metal. “The gold prices dropped right after the arrests because nobody dares to do business anymore for fear of getting arrested,” he said. Political and economic instability in the wake of a military coup more than three years ago has driven down the value of the kyat, Myanmar’s national currency, creating strong demand for gold. Prior to the February 2021 ouster of the country’s elected civilian government, gold was valued at 1.3 million kyat (about US$620) per kyattha, a unit of measurement approximately equal to 16.33 grams or 0.576 oz. Since then, however, the same amount has more than tripled in value to 4.5 million kyat. On Wednesday, the goldsmith’s association for Yangon Region set an opening price of 4 million kyat per kyattha, but dealers were selling for around 4.4 million kyat, according to industry sources. The regime routinely accuses dealers of manipulation when there is a sudden increase in gold prices, ignoring its own failure to rein in soaring inflation, which has fuelled demand for gold as a hedge against the rapidly rising cost of commodities. “The only thing going up in value on the market right now is gold. That’s why people are so interested in it these days,” said a member of the Yangon Region goldsmiths’ association. Yangon has a number of popular gold dealerships selling to a range of customers. While the very wealthy tend to buy 24k gold bars, those with less to spend will opt for smaller items such as pieces of jewellery, according to one gold trader. “Everyone wants to buy gold when they have extra money, and they almost always choose the big, famous gold dealers,” he said.

Myanmar junta detains gold traders for ‘unlicensed transactions’

The move comes as demand for gold grows amid concerns about the ongoing depreciation of the kyat and rampant inflation

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