MYANMAR: Businessmen say new kyat exchange rate will help Myanmar’s economy

Record ID: 240551

  • Title: MYANMAR: Businessmen say new kyat exchange rate will help Myanmar’s economy
  • Date: 4th April 2012
  • Summary: YANGON, MYANMAR (APRIL 3, 2012) (REUTERS) EXTERIOR OF THAIN PHYU BANK CUSTOMERS WAITING OUTSIDE BANK CUSTOMERS GOING INTO BANK CUSTOMERS INSIDE BANK CUSTOMERS WAITING IN LINE US ONE HUNDRED DOLLAR BILLS BANK WORKER BOARD SHOWING CURRENCY RATES CUSTOMERS WORKER CARRYING KYATS STACK OF KYATS BUSINESSMAN PATRICK DOIG WITH BANK WORKERS KYATS (SOUNDBITE) (English
  • Embargoed: 19th April 2012 13:00
  • Keywords:
  • Location: Myanmar, Myanmar
  • Country: Burma (Myanmar)
  • Topics: Business,Economy,Politics
  • Reuters ID: LVA1R5MP73TH5ZIFWA75JM9U1921
  • Story Text: Myanmar's floating currency has people in business interested to see the effects of the change, one businessman said on Tuesday (April 3).
    Myanmar's central bank set a reference exchange rate of 818 kyat per dollar on Monday (April 2), which was the first business day under a managed float currency regime that is the most dramatic economic reform yet by the one-year-old civilian government.
    For 35 years, the kyat was pegged to the International Monetary Fund's (IMF) special drawing rights at 6.4 kyat per dollar, but a parallel market has existed, with a recent rate in a range of 800 to 820 kyat.
    The parallel rate has been used for most everyday transactions.
    American businessman Patrick Doig from Sacramento, California said the new rate will open many doors for the long-isolated country.
    "I think it's going to be a very positive step for Myanmar -- one of the first steps along the road to becoming a more open economy and reconnecting with the rest of the world and that's very exciting," he said.
    The Central Bank of Myanmar (CBM) gave the new rate on its website along with indicative cross rates for other currencies.
    The CBM, which has given little information on the new system, held trial auctions with local banks in March and met bankers at the end of last week to finalise procedures, bankers said.
    Financial consultant U Bo said the new rate will be good for Myanmar's economy.
    "The outcome of making the currency at a floating rate seems to be good because my understanding is the international community is doing the same to do business," Bo said.
    CBM Deputy Governor Maung Maung Win told Reuters last week 11 private and three state-run banks would participate initially and another eight private banks might be included later.
    Auctions are initially planned for each business day but Win said they might not be needed every day once the system was up and running, without elaborating.
    There are no international banks operational in the former Burma, although some, particularly Asian names, have representative offices.
    Economic reforms and the expected easing of western sanctions are expected to stimulate more international currency flows and encourage foreign banks to set up shop in the country.
    Much hangs on the West's response to the conduct of by-elections that were held on Sunday (April 1).
    Aung San Suu Kyi, who led the fight for democracy under the former military regime and her National League for Democracy party, appear to have won a landslide victory and irregularities during the campaign and vote were on the whole minor.
    If the European Union (EU), the United States and other western countries accept the elections were free and fair, they could start to ease sanctions soon on trade and investment.
  • Copyright Holder: REUTERS
  • Copyright Notice: (c) Copyright Thomson Reuters 2012. Open For Restrictions - http://about.reuters.com/fulllegal.asp
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