12 April 2026 By Hlaing
KYAUKTAW, Myanmar — Residents in areas controlled by the Arakha Army (AA) in Myanmar’s Rakhine State are facing a severe cash shortage, with mobile money agents charging service fees as high as 6% for simple withdrawals.
The crisis has intensified as the traditional Thingyan water festival approaches. Local traders, who typically facilitate the movement of cash in the absence of formal banking, have begun halting business for the holiday, leading to a standstill in the regional economy’s liquidity.
Since the escalation of conflict in late 2023, formal government and private banks in liberated townships like Kyauktaw and Mrauk-U have remained closed. This has left the population entirely dependent on mobile platforms like KBZ Pay and Wave Money, which rely on local merchants to provide the physical banknotes.
“Back in March, the fee was only around 1.5%,” a resident from Kyauktaw told MPA. “But with the festival near, traders are closing shop and holding onto their cash. Those of us who need money for daily essentials are being hit with these 6% fees. We have no choice but to pay.”
This is not the first time the region has faced such an ordeal. Residents recalled similar spikes during the 2025 festival season. While rates usually drop slightly after the holidays, the underlying issue remains the military junta’s total blockade of the state, which has been in place since November 2023.
“I have to travel around looking for an agent who might charge 1% less,” a woman in Mrauk-U added. “Every percentage counts when you’re struggling to survive. But if you don’t withdraw it, you have nothing to spend.”
The shortage of physical currency is compounded by the poor condition of existing banknotes, which are often torn or heavily soiled. With all major land and sea routes from central Myanmar blocked by the military junta, goods and currency are unable to flow into the state.
Rakhine is currently forced to rely on expensive imports from neighboring India, driving up the cost of living while the value of the local currency in the shadow market dwindles. The military junta has also taken aggressive steps to stop the flow of cash; in July 2024, the navy intercepted a boat near Chaungtha beach carrying 6 billion Kyats intended for the Rakhine shadow banking market.
As the conflict between the AA and the military junta continues with no political resolution in sight, the people of Rakhine find themselves caught in a financial pincer movement—facing sky-high inflation on one side and a disappearing supply of cash on the other.
