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IMF economists will visit Burma to help modernise its complicated exchange rate system, an official said Wednesday, in a sign that the country’s new government is seeking economic reforms.
A technical team from the International Monetary Fund will visit the country also known as Burma in the second half of October, said Gita Bhatt, a spokeswoman for the Washington-based financial institution.
“We have received a request from the authorities in Myanmar [Burma] to help them prepare to modernise their exchange rate system and lift restrictions on the making of payments and transfers for current international transactions,” she said.
She declined further details on the trip. But the state-run New Light of Myanmar newspaper said that authorities had reached out to the IMF and sent trainees overseas to reform the exchange rate, calling it a top priority.
The “problem of exchange rate gap, main barrier to international trade, will be solved along with the proper evolution of market economy,” the newspaper quoted Finance Minister Hla Tun as saying.
Burma maintains multiple exchange rates, with the kyat currency’s official value — which the public sector is required to use — set far above the market level. Burma restricts its nationals from obtaining foreign currency.
A 2008 working paper by two IMF economists, which does not necessarily represent the views of the fund, found that Burma’s losses in efficiency due to the exchange rate system were equivalent to 14 to 17 percent of its economy in 2006-2007.
Burma is a member of the IMF and economists from the fund generally visit once a year, Bhatt said. The last formal consultation was in February 2010.
The military has ruled Burma since 1962, but the country nominally switched to civilian leadership earlier this year after November elections chose a new national assembly.
The opposition, led by Nobel laureate Aung San Suu Kyi, and the United States have voiced disappointment with the pace of reforms and believe the changes are primarily cosmetic, with the military still in charge.
The United States maintains economic sanctions against Burma, including its key gem industry, due to human rights concerns including the army’s alleged use of forced labour and rape in its campaigns against ethnic minority fighters.