Real exchange rate appreciation, resource boom, and policy reform in Myanmar

Koji Kubo

No 358, IDE Discussion Papers from Institute of Developing Economies, Japan External Trade Organization(JETRO)

Abstract: In the five-year period from 2006 to 2011, the real exchange rate of the Myanmar kyat appreciated 200 percent, signifying that the value of the US dollar in Myanmar diminished to one third of its previous level. While the resource boom is suspected as a source of the real exchange rate appreciation, its aggravation is related to administrative controls on foreign exchange and imports. First, foreign exchange controls prevented replacement of the negotiated transactions of foreign exchange with the bank intermediation. This hampered government interventions in the market. Second, import controls repressed imports, aggravating excess supply of foreign exchange. Relaxation of administrative controls is necessary for moderating currency appreciation.

Keywords: Myanmar; Foreign exchange; Exchange control; Trade policy; Imports; Real exchange rate; Resource boom; Import controls (search for similar items in EconPapers)
JEL-codes: F31 O24 Q33 (search for similar items in EconPapers)
Date: 2012-07-01
New Economics Papers: this item is included in nep-opm and nep-sea
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Citations: View citations in EconPapers (2)

Published in IDE Discussion Paper = IDE Discussion Paper, No. 358. 2012-07-01

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Journal Article: Real exchange rate appreciation, resource boom, and policy reform in Myanmar (2013)
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