Korean companies in Myanmar are wrestling with the Southeast Asian country’s strengthening currency as it increasingly chokes the viability of their exports, a report said Monday.

Burma’s currency, the kyat, is rapidly climbing against the dollar and its counterparts in Asia, up about 30 percent from the beginning of the year. A dollar now costs about 650 kyat, versus 1,000 a year earlier.

Korean businesses there ― 70 percent of which are in the textile and sewing sector ― have been hit hard by the exchange rates, according to the report by the Korea Trade-Investment Promotion Agency.

“There is absolutely no profit if the exchange rate falls below 750 kyat against a dollar,” an official at a fabric company was quoted.

“If such a trend continues for the long term, most Korean and Burmese contract manufacturers will go bankrupt given that they cannot increase export prices.”

According to the state-run agency, many local firms have scaled back their operations and workforce in recent months.

Most exporters would have to carry out massive layoffs and shut down production lines if the dollar dips below the 650 kyat level, experts said.

“The currency is rising but Korean enterprises can’t do anything but watch the trend to survive there,” said Hwang Eui-tae, chief of KOTRA’s Asia division.

“But firms should seek ways to boost the feasibility because on the other hand Korea’s exports to Myanmar are gaining a competitive edge.”

Myanmar has been striving to fend off the rising currency as it hurts exporters and dampens economic growth in the country tussling to escape from decades-long poverty.

At the end of last month, the government asked the International Monetary Fund to help modernize its complex exchange rate regime and embark on economic reform.

By Shin Hyon-hee (heeshin@heraldcorp.com)