The coup, sanctions, and the kyat's collapse

Myanmar's currency and inflation charts break sharply in February 2021, when the military coup triggered capital flight, Western sanctions, and the freezing of roughly USD 1 billion in Myanmar's reserves held at the US Federal Reserve. The kyat lost about 47.5% of its value against the dollar by October 2021 alone, and the Central Bank of Myanmar's attempts to intervene, including releasing around USD 120 million into the market over the following months, proved far too small to offset the pressure. The fiscal deficit reached 9.2% of GDP in 2021, equivalent to nearly USD 6 billion, and the central bank financed over half of that gap by printing money, feeding directly into inflation that pushed food prices up roughly 41% year on year by March 2022. A further round of capital controls in April 2022, including forced conversion of export earnings into kyat and tighter import licensing, failed to stabilize the currency and instead accelerated a shift by households and businesses into gold, real estate, and foreign currency, eroding trust in the kyat and the banking system further still.