(Reuters) - A rapid depreciation of Myanmar's currency is pushing up the prices of essentials, including food and medicine, crippling ordinary households in the Southeast Asian country wrecked by civil war and a crumbling economy.

The Myanmar kyat has been extremely volatile in recent days, plunging to a low of 7,500 to the dollar in the black market last week from 5,000 earlier in the month, according to four foreign exchange traders. The plunge followed reports that the Myanmar junta was printing more kyat to prop up the currency, two traders said.

"People are frantically buying (Thai) baht and selling kyat," said a money transfer agent in neighbouring Thailand who asked not to be named.

"The only ones selling baht are those sending money back to Myanmar from Thailand."

The kyat has since recovered to around 6,000 to the dollar in the black market while the central bank's official reference rate was 2,100 on Tuesday, with an online market trading rate of 3,400. But prices of essentials have not come down, six residents said.

The kyat's fall, rising transportation costs and disruptions in border trade have sent costs of some medicines and groceries soaring in Myanmar's main cities in recent weeks, they said.

All six, who include traders, pharmaceutical officials, a doctor and Myanmar residents, asked not to be named fearing retribution from the junta.

"It used to cost about 25,000 kyat ($11.94) per week for our household groceries until about a month ago but now it costs about 40,000 kyat," said a 27-year-old housewife from Naypyitaw, Myanmar's capital.

A spokesman for Myanmar's military government did not respond to calls seeking comment.

Once seen as a promising frontier market, Myanmar has been torn by violence since the military's 2021 overthrow of an elected government, which triggered an investor exodus, Western sanctions and protests that have grown into a nationwide armed rebellion.

The junta has steadily lost control of vast areas of the country of 55 million people, including key trade routes with China and Thailand, and has struggled to manage the economy.

Poverty in Myanmar is more widespread than at any time in the last six years and economic growth is likely to remain at a 1% in the current fiscal year, the World Bank said in June.

'NO SYSTEM IN PLACE'

At the same time, household incomes have declined - after adjusting for inflation - and unemployment has expanded, the World Bank said in June, underlining growing pressures for large sections of the population.

"It's chaotic and 100% caused by the regime's economic policy and decision making," said analyst David Mathieson, referring to the rising inflation and other economic woes.

The junta has taken a heavy-handed approach in its attempt to stabilise the currency and the economy.

Since June, it has arrested at least 56 people, including gold traders, foreign exchange dealers, and agents selling foreign real estate, to try and stem the kyat's slide.

With the currency in falling, the cost of imported products, including essentials like cooking oil that is brought in from Thailand, has jumped in recent weeks, two grocers said.

A rise in transportation costs, due to a shortage of imported fuel that led to long queues in several parts of the country last week, has further impacted retail prices, they said.

"The price has doubled or tripled, due to transportation costs," said a grocery store owner in Mawlamyine, a city in southern Myanmar, referring to some vegetables.

Medicines, including blood glucose strips used by diabetes patients, have become between 10% and 30% more expensive in the last month, two pharma officials and a doctor said.

Yet, even at inflated prices, the availability of certain medicines is limited due to the impact of ongoing fighting on border trade, they said.

The National Unity Government (NUG), comprising former lawmakers and other junta opponents, said the military has no proper plan to manage the current economic situation.

"They have no system in place and are simply printing more kyats, which is fuelling inflation and creating an economic crisis like we've never seen before," said spokesman Kyaw Zaw .

($1 = 2,093.7000 kyat)