April 4 - Myanmar manage-floats its currency, the Kyat, in the most dramatic economic reform undertaken so far by the one-year-old civilian government. Arnold Gay reports.
It took effect Monday, largely overshadowed by the excitement over Myanmar's historic elections. But analysts say the managed float of Myanmar's currency, the Kyat, is the most dramatic economic reform undertaken so far by the one-year-old civilian government. Myanmar's central bank (CBM) set the reference exchange rate at 818 kyat per dollar, scrapping the old fixed exchange rate that's been in place for 35 years. The managed float aims to unify multiple exchange rates used in the country and weaken black market rates that have hurt exports. The central bank has given little information on the new system, but financial consultant U Bo, says the float should help Myanmar's businesses. (SOUNDBITE) (Burmese) FINANCIAL CONSULTANT, U BO, SAYING: "Floating the currency seems to be a good idea, because my understanding is the international community is doing the same, to do business. American businessman Patrick Doig says the new rate will open many doors for the long-isolated country. (SOUNDBITE) (English) AMERICAN BUSINESSMAN, PATRICK DOIG, SAYING: "It will be interesting to see what happens over the next little while, because that will, I think, reflect what sort of confidence the international markets have in Myanmar and the economy here; and 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." According to the CBM, 11 private and three state-run banks are participating in daily auctions, with eight other private banks possibly taking part later. No international banks operate in Myanmar, but further economic reforms and the expected easing of western sanctions are expected to stimulate more international currency flows, and encourage foreign banks to open local offices. Arnold Gay, Reuters.