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Real exchange rate appreciation, resource boom, and policy reform in M yanmar
Author(s) -
Kubo Koji
Publication year - 2013
Publication title -
asian‐pacific economic literature
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.232
H-Index - 21
eISSN - 1467-8411
pISSN - 0818-9935
DOI - 10.1111/apel.12005
Subject(s) - convertibility , exchange rate , currency , foreign exchange market , liberian dollar , boom , foreign exchange , business , monetary economics , international economics , value (mathematics) , government (linguistics) , economics , finance , linguistics , philosophy , machine learning , environmental engineering , computer science , engineering
Over the six‐year period 2006‐11, the real exchange rate of the M yanmar kyat appreciated 200 per cent, resulting in the value of the US dollar in M yanmar falling to one‐third of its pre‐2006 level. While the resource boom is suspected to be the source of the real exchange rate appreciation, administrative controls on foreign exchange and imports had much more impact. Foreign exchange controls limited the convertibility of the kyat to foreign currencies and spurred negotiated transactions of foreign exchange outside the banking sector, hampering the foreign exchange market interventions of the government and C entral B ank. Import controls repressed imports, aggravating excess supplies of foreign exchange. Relaxation of administrative controls is necessary for moderating currency appreciation.