Jul 28, 2011

Myanmar to readjust foreign exchange rate

Myanmar is deliberating to readjust its foreign exchange rate in a bid to stabilize the domestic foreign exchange trading market, local media reported Wednesday.

Coordination is being made with related government departments on the probable move, the 7-Day News quoted Union Minister of Finance and Revenue U Hla Tun as saying.

Meeting with the Bank Administration Committee and the Bankers' Association in Nay Pyi Taw recently, U Hla Tun said the readjustment is aimed at facilitating the country's economic and financial links with the international and development of domestic foreign exchange market.

He disclosed that a payment system development committee of the bankers' association will be formed with local and foreign experts and organizations to update the country's payment system.

Myanmar's foreign exchange rate against US dollar was traditionally designated as around 6 Kyats per US dollar since 1975, while the market exchange rate fluctuated between 780 and 1, 000 Kyats per dollar for the past several years.

Experts view that if suitable rate is officially readjusted, it will facilitate the work flow of economic entrepreneurs.

Early this month, US dollar picked up a little in value in Myanmar after sharp drop and remained relatively steady against Kyat, exchanging at around 810 Kyats per dollar in the first two weeks of this month but fell again slightly to 790 Kyats per dollar this week, according to market survey.

US dollar once fell sharply to as low as 780 Kyats per dollar in June from 820 Kyats per dollar in May.

The USD-Kyat exchange rate at between 800 and 900 Kyats per dollar had prevailed for half a year since December last year.

It started to fall from 900 kyats per dollar in early last December to 830 Kyats in the beginning of 2011 but it picked up to 900 Kyats again in late February. However, the rate kept falling to 820 Kyats until the end of May.

Exporters were affected due to the fall of US dollar for the past six months' period.

Demand for USD did rise in Myanmar in August 2010 with the market exchange rate against Myanmar Kyat once standing at as high as 1,010 Kyats per dollar, However, it fluctuated until now.

Source: Xinhua