Wednesday, December 26, 2012

TOP 10 Events of 2012—No 6

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Wednesday, 26 December 2012 12:35 Mizzima News

Mizzima’s sister publication, M-ZINE+, has selected what its editors have decided are the 10 biggest events or issues in Burma over the past 12 months.

We began the countdown on December 22 at No. 10, and will recall one issue each day until we finish on December 31 with the most momentous event of the year.

No rest for the little elves at www.mizzima.com, we will be working all the way through Xmas and New Year, bringing you the latest and most accurate news from Burma.

6. Currency exchange reform for the kyat

This picture in September 2011 shows Burmese bank workers counting kyat notes in Rangoon. Photo: AFP

For years, there was “no size fits all” in Burma when it came to exchange rates. Calculate the big wad of kyat in your bag at the official rate and you could start thinking about that new boat you had your eye on. Do the sums at the black market rate and it was simply enough for a few meals at the nearby eatery. Something was wrong.

During the socialist period with its inefficient command economy structures and autarkic predilections, the government saw the national currency as a child needing excessive protection from all and sundry. Even after 1988 with the moves towards a market economy, it was very difficult for the authorities to consider letting go.

To be sure there was still the black market and official intermediary measures, such as those foreign exchange certificates (FECs), which are due to be abolished in 2013.

There was also a barter system (in the 1970s tourists could exchange cigarettes and Johnny Walker Black Label Scotch for a good rate in kyat). And of course for certain individuals, organizations and companies with clout and deemed ever so helpful, the rates of exchange were “negotiable”.

But something had to be done about the kyat exchange rates to set the stage for more aid and investment possibilities, of that the World Bank and IMF were insistent.

In April, Myanmar’s Central Bank finally took the plunge and allowed the kyat to float. Potential investors most definitely took notice.
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For more background:

http://www.mizzima.com/business/6750-burma-to-float-currency-starting-april-1.html

http://www.mizzima.com/business/7284-burma-to-issue-10000-kyat-banknote.html
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M-ZINE+ is a business weekly available in print in Yangon through Innwa Bookstore and through online subscription at www.Mzineplus.com.

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