Volatility Likely After Govt Loosens Grip on Kyat

Volatility likely after govt loosens grip on kyat

From The Myanmar Times

By Aye Thida Kyaw | Monday, 29 July 2013

Domestic banks say they are ready for the inter-bank foreign exchange trading market that will be launched in August as the government takes another step toward a freely traded kyat.

U Zaw Lin Htut, senior general manager of international banking at Kanbawza Bank, said lenders have already installed the necessary telecom infrastructure, including extra land lines, and have developed backup plans to deal with network failures.

Once the market opens, domestic banks will be able to negotiate exchange rates with each other. Rates can change in an instant rather than once a day as they do now, U Zaw Lin Htut said, referring to the central bank’s daily auction that sets the exchange rate between the kyat and the US dollar every weekday at 9am.

He predicted that the market will be “lively and dynamic”, but said that trading should be conducted within a narrow margin so that exchange rates remain stable.

Read the full article here: http://www.mmtimes.com/index.php/business/7586-volatility-likely-after-govt-loosens-grip-on-kyat.html