Thursday, August 9, 2012

Burma to abolish foreign exchange certificate in 2013

Thursday, 09 August 2012 13:39 Theingi Tun

Rangoon (Mizzima) – Burma’s Foreign Exchange Certificate (FEC) will be abolished, most likely in March 2013, Maung Maung Win, the vice chairman of the Central Bank of Myanmar, told Mizzma on Wednesday.

Burmese foreign exchange certificates  Photo: Mizzima

“We will abolish it as soon as possible,” he said. “Earlier, it was difficult to use dollars in Burma, so we issued the FEC as an equivalent to the dollar as a type of currency to be used in Burma.”

Presently, Burma allows both dollars and FECs, which are pegged at different exchange rates.

Banking expert San Thein said abolishing the FEC in order to make the currency exchange rate dominate is a necessary action.

“Earlier, it was ‘multiple exchange rates.’ If the FEC is abolished gradually, eventually there will be no FECs in the market,” said San Thein.

Currently, the government is drafting a new foreign currency management law allowing all foreign currencies to be exchanged freely.

In Burma, the FEC was introduced in 1993. The FEC purchase rate on Wednesday was 866 kyat, and for selling, 876 kyat per FEC.

In April, Burma instituted a currency exchange system, replacing an artificial system established more than 20 years ago. The former exchange rate was around 6 kyat per US$ 1.

The rate on Thursday was 872 kyat per US$ 1.

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