The Central Bank of Myanmar is considering lowering Burmese interest rates to bring them in line with international borrowing and lending standards.

Currently, the Central Bank sets lending rates at 13 percent per annum while banks offer 8 percent for savings, significantly higher than Burma’s Southeast Asian neighbours where rates are generally fixed at around 2.5 percent for loans and 3 percent on savings.

Satt Aung, deputy-president of the Central Bank of Myanmar said the bank is looking to reset interest rates according to international standards.

“Our bank interest rates are higher than other ASEAN countries, but we have to consider a lot of different factors if we reset the rates,” he said. “If we did it immediately, the move would prompt many of our clients to withdraw their money straight away.

“We need to prepare for many eventualities. In money markets, a tiny mistake can lead to a massive chain of reactions,” he said.

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Than Lwin, the deputy-director of privately owned Kanbawza Bank, said it is necessary to consider the country’s economic situation when setting the interest rates.

“In western countries, bank interests are lowered during economic recessions, but they can do that because they can maintain inflation and prevent commodity prices from going up,” he said. “But here in Myanmar [Burma], the cost of living has gone up, therefore we have to consider whether we can reduce the price of commodities.

“We cannot simply fix rates at 1 percent to fall in line with other countries,” Than Lwin added. “We have to wage it according to our economic situation.”

The deputy-president of the Central Bank of Myanmar said the bank will be working with the International Monetary Fund, the World Bank and the Asian Development Bank on the subject of reducing interest rates.