YANGON Aug 5 Myanmar introduced interbank
currency trading on Monday, a senior central bank official said,
the latest reform to the financial sector, which follows the
managed float of the kyat currency from April 2012.
Foreign banks are not allowed to operate in Myanmar and the
local banking system is rudimentary, so the interbank market is
likely to be tiny initially.
"We have allowed local private banks to trade in foreign
currency among themselves effective today, taking a major step
forward in financial reforms," the central bank official told
"They now can compete on equal terms with each other with
compete transparency," he added, asking for anonymity since he
was speaking to the media without authorisation.
Than Lwin, vice-chairman of KBZ Bank, the biggest private
lender in the country, and a retired vice-governor of the
central bank, said: "We do welcome their allowing interbank
marketing. It's a big step towards the emergence of a foreign
President Thein Sein took office in March 2011 and, at the
head of a quasi-civilian government, has opened up Myanmar with
a series of political and economic reforms, after half a century
of military rule.
Under International Monetary Fund supervision, the
authorities started unifying the various exchange rates at the
time of the introduction of the managed float in 2012, and the
central bank started selling foreign currency to private banks
In an annual report on Myanmar's economy published late on
Friday, the IMF said that as of May the currency had fallen
about 13.5 percent since the float, which had taken it closer to
its long-run fundamental value. Last year it
said the kyat was as much as 40 percent overvalued.
The central bank sets a benchmark rate against the dollar
each day. On Monday, it was 975 kyat per dollar, down
from 945 on May 31, central bank data showed.
The president enacted a law in July that gave the central
bank greater independence. Previously, it was part of the
Ministry of Finance.
Kyaw Kyaw Maung, a retired central bank governor, has been
brought back to head the new monetary authority.
(Reporting by Aung Hla Tun; Editing by Alan Raybould and