Myanmar state media reveal upcoming currency reforms
March 29, 2012, 11:51 am TWN
YANGON, Myanmar -- Myanmar's currency will be largely unshackled from government controls next week in a significant step toward reforming the impoverished country's economy, state media reported Wednesday.
The value of the kyat currency will be determined by a managed floating exchange rate system that will become effective April 1, the state-run New Light of Myanmar newspaper said.
The International Monetary fund says the change could lift a major constraint on growth in one of Asia's least developed countries.
The move is part of a sweeping wave of reforms instituted by the government of President Thein Sein, which inherited power in 2011 from a military junta that ruled for 49 years.
For decades, the kyat has been held at an artificially high level based on a notional currency that is managed by the IMF. The kyat's official rate is about 125 times stronger than the roughly 800 kyat to the dollar rate it changes hands at on the black market, which is used for most transactions.
The official rate is used by the government to calculate the budget and revenues of state enterprises. Only state banks can conduct transactions with overseas banks, forcing many transactions underground.
Those constraints have impeded business and foreign investment in the country, which is also undermined by tough trade and economic sanctions by the U.S. and other Western governments.
Myanmar's central bank will oversee the kyat's managed float.