缅甸启动汇率改革

The reform of the Kyat, Myanmar's currency, is considered a pretty big step in opening up the country to foreign investment. And this man right here, president Thein Sein, has steered his country out of decades of isolation and onto the fast lane of reforms since he took power just last year.

Now, it's generally accepted that one US dollar will get you about 800 Kyat, come April 1st, this may weaken to about 820 Kyat. But right now 800 Kyat to the dollar is not actually the official government rate. This straight line that you can see here is the epitome of government control, the official rate is one dollar to 6.41 Kyat and it's held this rate, as you can see, for the past 10 years. Interestingly, the government itself drafts its own budget using the unofficial and a much weaker rate of 800 Kyat to the dollar.

Now what does currency reform mean for foreign investors, in particular, well, for one, exporters who was forced to use the official rate. Well it will make it much cheaper for them to do business in Myanmar. The official rate, as it turns out, is 120 times stronger than the unofficial one. So foreign exporters get to use the weaker rate, that could boost their profits pretty tremendously.

Also, specifically, Myanmar's textile industry could gain from a weaker currency, but if more foreign companies dive in, that could also drive the value of the Kyat stronger, that could actually backfire, making prices too expensive and Myanmar's textiles less competitive.

Interestingly, in Myanmar, (it is) used to be (that)  the visitors were forced to change money at the government rate immediately upon arriving in the country, but to get a better rate they would then have to go the capital's back alleys to change money. As April 1st, the value of the Kyat should be about the same from those back alleys and to the world market.