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IMF chief lauds Myanmar’s currency reform

/ 06:19 AM April 22, 2012

WASHINGTON—IMF chief Christine Lagarde on Saturday praised Myanmar’s overhaul of its complex exchange-rate system, the new government’s most radical economic reform yet in a bid to lure investors.

The International Monetary Fund has been working “discreetly” with the Myanmar monetary authorities, particularly on the recent currency reform, Lagarde said at a news conference.

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“We’ve been working with the central bank of Myanmar on that very, very actively,” she said in response to a reporter’s question.

“It’s a tribute to them that they have made this change… and that they’ve been so successful.”

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Myanmar began a managed flotation of its currency, the kyat, on April 2.

The central bank set a reference rate of 818 kyat to the dollar, bringing the official currency rate in line with its value on the black market.

The central bank said the float would allow market forces to determine the value of the kyat while leaving room for it to influence the unit’s value.

Analysts said the simplified currency regime would help facilitate trade and investment as Myanmar gradually opens up.

“We continue to provide any technical assistance that they need,” Lagarde said. “This is happening, you know, on a daily basis.”

The currency overhaul is part of burgeoning reforms to modernize an economy left in disarray by decades of military rule and isolation.

Myanmar, long a global outcast, has been rapidly rehabilitated since polls last year saw the election of a nominally civilian government.

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Earlier this month, democracy campaigner and Nobel Peace Prize laureate Aung San Suu Kyi, who spent decades under house arrest under the military regime, was elected to parliament.

Western nations have begun lifting sanctions against Myanmar, also known as Burma, to encourage the sweeping reforms.

“Some of the sanctions have been lifted already,” Lagarde said.

“There is a momentum that is clearly initiated and my dearest hope is that it continues.”

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TAGS: IMF, IMF chief Christine Lagarde, International Monetary Fund, kyat, Myanmar, Myanmar currency reform, Nobel Peace Prize laureate Aung San Suu Kyi
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