Business News
New Myanmar government to drop foreign exchange certificates
Aug 12, 2011, 10:10 GMT
Naypyitaw, Myanmar - Myanmar's new government is planning to withdraw foreign exchange certificates (FECs) from the market, after imposing them on foreigners for almost two decades, officials said Friday.
'In the near future there will be no more FECs, just kyat and foreign currencies,' Information Minister Kyaw Hsan told a press conference, one of the first held by Myanmar's new elected government since it took office in April.
The FECs were first introduced in 1993 as a means of keeping foreign currency under government control.
Visiting foreign tourists were required to purchase 200 US dollars worth of FECs at the airport on arrival and foreign businessmen and aid workers were required to use the FEC for official transactions, often at an exchange rate loss.
The FEC was intended to prevent all foreign exchange from being traded on the black market, which offered rates of about 1,000 kyat to the dollar compared with the government's official rate of 6 kyat to the dollar and 450 kyat for one FEC.
'Burma's multiple exchange rates make conversion and repatriation of foreign exchange very complex, and ripe for corruption,' one US State Department report said of the system.
In recent months, the local kyat currency has strengthened against the dollar and FEC, apparently on account of a huge influx of dollars into the economy.
Kyaw Hsan said holders of FECs should not worry, because the government will buy back the currency from them with dollars or kyat, although he did not specify at what rates.
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