Friday, 19th July 2024

Burma to float kyat next month

Published:  29 Mar at 9 AM
Burma has revealed that it will start floating its currency as of 1 April in order to attract investors from abroad, reports the BBC

The Central Bank of Myanmar (Burma) said that the local currency, the kyat, will be determined by supply and demand from now on. The target is to unify Burma’s various exchange rates. The country has been carrying out reforms since the new civilian government, which is fronted by former generals, took control from the military in 2011.

The official exchange rate at present is one US dollar for 6.41 kyat. However, experts claim that when floated, the kyat could be valued at roughly 800 kyat to the greenback, which is the current black market rate.

Under a float system which is managed, the market determines the exchange rate of a currency. The central bank, at the same time, publishes a reference exchange rate each day in order to influence the market. The Central Bank of Myanmar said in a statement that a major part of this initiative is to unify the exchange rates and slowly eliminate restrictions on transfers abroad and international payments.

Burma is rich in resources and wants to attract investment from abroad to offset the impact which sanctions from the West have had; however, investors have been deterred in the past because of multiple exchange rates. Burma is rich in timber, gas and precious stones.