Business

Burmese Banks Balk as Exchange Rates Rise

By THE IRRAWADDY Friday, February 3, 2012

A man leaves an official bureau de change in Rangoon on Dec. 7, 2011. (Photo: Reuters)

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Many official bureaus de change at private banks in Rangoon have stopped purchasing US dollars due to competition from outside moneychangers, say financial sources in the former Burmese capital.

An official from a private bank told The Irrawaddy that while US dollars were buying and selling for 818 kyat at banks along Thein Byu Road, black marketeers were offering 812—better for those buying dollars rather than buying kyat.

“If traders and dealers buy dollars outside and then sell them at banks on Thein Byu Road they will get six kyat profit on the dollar,” he said.

Since the Central Bank of Myanmar amended regulations on Feb. 1 to allow anyone—with or without paperwork—to buy or sell up to US $10,000 at official bureaus de change, those selling dollars have tended to use the official channels.

A woman, who is the person-in-charge at a money changer of the Myawaddy Bank, told The Irrawaddy that private banks had suffered losses under different exchange rates thus, they had limited selling amount.

“We have bought a lot of dollars,” said a clerk at the bureau de change in the Myawaddy Bank. “That’s why we can now only accept $300 maximum at a time.

“However, anyone who wants to sell dollars will not be limited,” she said.

An economist in Rangoon, however, said it is important for the government to act in the short term by amending laws and regulations while implementing a market economy.

“Stop putting up the dollar price and let the exchange rates go up and down in accordance with the market's nature,” said a city economist. “The country’s economy will flourish on that.

A good footballer must be able to play both on a grass pitch and a muddy one,” he said.

“What the government must do is to annul, amend and promulgate whatever laws it can, and prepare in advance for foreign investments,” he concluded.

In September and October last year, the Burmese government granted 17 private banks licenses to change money. The banks opened a total of 57 bureaus de change or money-changing offices with rights to buy and sell US dollars, Euros, Singapore dollars and Foreign Exchange Certificates (FECs).

Any Burmese citizen wishing to exchange money is obliged to produce an ID card, and submit evidence of where the money came from if the amount is more than $10,000.

COMMENTS (5)

Marty Myanmar Wrote:

08/02/2012

This thing of dual exchange rate in Myanmar. sometimes I think that the only reason that Myanmar shut itself from the world was to save itself from the shame of running such idiotic policies.

Maybe we don't have any qualified persons at all who can run a proper economy.

The generals are afraid of the US or someone invading the country. But normally it's themselves that they are afraid of most.

Oo Maung Gyi Wrote:

07/02/2012

Burma is a country politically mess and monetarily bankcrupt. Now the country is under the debt of US dollars nearly 12 billion due to mismanagement of two malitary regimes ruled by General Ne Win and Snr.General Than Shwe. Now all tax payers and countrymen have liabilities to pay back this debt so that International Monetary Fund ( IMF ) can make restructure Burma monetary system otherwise no body in the world will come and invest Burma. So President Thein Sein Government unavoidable duty is to cooperate with ASSK to get world support.

Pauk Kyaung Wrote:

06/02/2012

It's amazing in Yangon foreign exchange market. Even in the official exchange centre, the staffs are making money via this process. They are not allowing the people who really want to exchange from US Dollars to Myanmar Kyats not only limit to $300.00, checking US Dollars notes very thoroughly and sensitively. If the US Dollar is a little bit old, they are not accepting at all. They are creating obstacles to this process. However, if their contact came, they allow them to exchange according to the government's limit (ie: maximum US$10,000.00). What ever the law is change, the people in the corrupted mechanism hasn't change. Long way to go for all reforms in Myanmar.

SH Wrote:

04/02/2012

Do you think your news article make any sense? Please compare these two statements from your article.

“If traders and dealers buy dollars outside and then sell them at banks on Thein Byu Road they will get six kyat profit on the dollar,” he said.

“However, anyone who wants to sell dollars will not be limited,” she said.

Oo Maung Gyi Wrote:

04/02/2012

Since Burma is going to open market economy and trade liberalization not necessary to control and make limitation of foreign currency to handle by private sector, so let business peoples handle foreign currency. Once Burma parliament promulgate foreign exchange law, automatically foreign currencies will flows to all banks those have license to handle foreign currencies. The more you control foreign currencies the more it will create black market. Not necessary to afraid of fluctuation it is natural to fluctuate daily then only national currency become strong. For example Thai Baht is very stable now, a US Dollar is Baht 31.30 to 31.45 in between ups and dawn.