If Russia and Ukraine go to war, what will happen to Burma?
After months of stalemate, Russia attacked Ukraine on February 24, and the two countries officially went to war.
Although the war is thousands of kilometers away, the outbreak of war has had a profound impact on the global energy, supply chain and economic situation, and to a certain extent, it has also affected the lives and livelihoods of the Myanmar people.
Firefighters were present in the city of Chuguiv, located on the Banks of the North Donets River in eastern Ukraine, where some houses were blown up. Ukraine's president said on Feb. 25 that the fighting had killed 137 people and wounded another 316. (AFP)
Energy prices are rising
Russia is an important global energy supplier, and Russia and Ukraine will certainly cause fluctuations in energy market prices. The first is the rise in crude oil prices.
Myanmar's domestic fuel market news, from the fuel merchants learned that the Russian-Ukrainian conflict led to a record rise in the dollar, therefore, domestic fuel prices are likely to continue to rise.
Data show that on February 1, the price of one liter of Octane gasoline was 1605 Kyats, the price of 95 Octane gasoline was 1660 Kyats, and the price of 1 liter of diesel was 1630 Kyats. On February 24, the price of one liter of Octane gasoline was 1715 kyats, the price of 95 octane gasoline was 1770 kyats, and the price of one liter of diesel fuel was 1690 kyats.
A person in charge of an enterprise that imports fuel oil said that because of the Conflict between Russia and Ukraine, domestic fuel prices may continue to rise, and fuel prices have nothing to do with the domestic situation. Now the price of diesel has risen a lot, the price of one liter of diesel has risen to 1690 kyats, an average increase of about 30 kyats. Coupled with the reduction in fuel imports in Singapore, it has a certain impact on the price increase in the domestic fuel market.
A taxi driver in Yangon said that it is not cost-effective to calculate the fuel bill now, so we have to be forced to suspend business and drive out when we need to. After a liter of fuel prices exceeded more than 1,000 kyats, it never fell down, and now the situation is a small fall and a big rise, when the oil price falls, it falls by 10 kyats each time, and when it rises, it directly rises back to about 40 to 50 kyats.
A long-distance passenger driver said that after February last year, the domestic economy and people's livelihood have been seriously affected by the depreciation of the currency and the increase in prices. The logistics and transportation and passenger transport industries are also facing losses due to rising fuel prices, and a large amount of fuel costs need to be deducted for each car.
Fuel-related industry insiders speculate that domestic fuel prices are related to foreign currency exchange rates and world crude oil prices, if the Myanmar authorities can not regulate the exchange rate, resulting in myanmar continues to depreciate, Myanmar's domestic currency inflation, price rise will become more and more serious.
Gold prices skyrocketed
Affected by international tensions, on February 24, the world gold price of one ounce was $1,943, and in the domestic market, the price of first-class gold rose to 1,925,000 Kyats. On February 23, the price of first-class gold in the domestic gold market was 1,901,500 kyats, and in just one day, the price of first-class gold rose by more than 20,000 kyats.
Wu Miaomin, chairman of the Yangon Provincial Gold Merchants Association, said that in order to prevent market chaos from being manipulated, we have taken countermeasures. At present, domestic transactions of gold can only use cash, and online transfers cannot be used for the time being. In order to restore the stability of the domestic gold market price, we have adopted a number of regulatory measures, and at the same time, we have also carried out plans to supplement the demand for gold in the market.
On February 24, the price of one ounce of gold rose to $1,942 due to the conflict between Russia and Ukraine. On the 24th, the price of Myanmar's domestic gold market also rose to 1936,000 KYOs at the close of the market due to the impact of the international situation.
Wu Miaomin, chairman of the Yangon Provincial Gold Merchants Association, said that on February 24, the domestic gold market demand was very large, and the rise in the domestic gold market price was also related to the world gold price, in order to stabilize the domestic market, we traded in cash to prevent someone from taking the opportunity to manipulate the market.
The stock market fell
After Russia's attack on Ukraine, global stock markets suffered setbacks to varying degrees.
Russian benchmark stock index MOEX plunged 14%, Europe's Stoxx 600 fell 0.8%, and the US S&P 500 and Nasdaq both fell more than 2%. Asian stocks were also affected, with the Singapore Straits Index falling more than 3%.
Market analysts said there were concerns about heightened geopolitical risks as Russia began to invade parts of Ukraine, leading to a full-blown sell-off.
For now, the risk of stagflation has increased, as actions triggered by the Russian-Ukrainian crisis, such as retaliation in the form of more sanctions or military action by the United States and its allies against Russia, could dampen global economic sentiment and raise global commodity prices, thereby keeping inflation high in the short to medium term.
