Myanmar embarks on monetary reform
Myanmar embarks on monetary reform
Myanmar has made a master plan for the monetary reform which is to be implemented with the assistance of the World Bank.
The World Bank (WB) opened its first country office in Yangon Wednesday, announcing preparation to grant US$85-M to support Myanmar’s reform.
The office is also involving International Monetary Corporation (IMC) and the Asian Development Bank (ADB).
Under the master plan, Myanmar is to enact Foreign Exchange Management Law soon, Minister of Finance and Revenue U Hla Tun disclosed on Thursday, saying that the government will allow local private banks to set up joint ventures with foreign counterparts that have opened offices in Myanmar.
Foreign banks from Singapore, Bangladesh, China, France, Japan, Malaysia, Netherlands, Thailand, Cambodia, Brunei, Vietnam, South Korea, the United States and Britain have opened 20 representative offices in the country.
The minister added that committees have also been formed to deliberate securities dealing bill for the development of capital market.
He expected stock exchange to be launched in Y 2015 under the capital market development roadmap.
Efforts are also being made for the accomplishment of ASEAN Economic Community (AEC) by Y 2015, he added.
Meanwhile, Japan said it will provide technical aid to Myanmar for the development of capital market.
A memorandum of understanding on the technical aid was signed between the Central Bank of Myanmar and the Daiwa Research Institute and Tokyo Stock Exchange in May.
Starting in July, 11 authorized private banks in Myanmar admitted opening of foreign currency accounts in USD, EUR and Singapore Dollar as well as FEC (foreign exchange certificate).
However, such services are limited to government departments, state-owned economic enterprises (SEE), joint ventures with the SEE, foreign embassies and diplomats.
Previously, just 2 state banks; Myanma Foreign Trade Bank ( MFTB) and Myanma Investment and Commercial Bank (MICB) were allowed to provide such services.
Aimed at stabilizing the exchange rate and ensure emergence of foreign exchange market in the country, the Central Bank of Myanmar granted the 11 Myanmar private banks to trade the three foreign hard currencies.
These banks have set up exchange counters at banks, airports, hotels, shopping centers and major tourists destinations for the convenience of tourists.
Moreover, starting on 1 February Myanmar government eased foreign exchange control allowing exchange of up to US$10,000 with Myanmar Kyats without any documentation.
The fresh regulations apply to both Myanmar citizens and foreigners in order to get rid of the Black foreign exchange market.
Beginning in April, Myanmar changed the fixed foreign exchange rate regime to a managed floating exchange rate and the USD is quoted at 880 Kyats currently, up from 818 Kyats when it was first applied.
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