Informal Currency Deals and New Official Customer Dealing: Who Chooses Which?
Normal trade export receipts—formerly labeled as “export earnings”—are still traded directly between private exporters and importers regardless of their legal uses. By using the original data taken from a survey of private firms, we examine which firm attributes are related to their uses of informal currency deals outside banks. The empirical results of probit regression show that firms’ operational length—a proxy variable for habituation to the unofficial market—is not associated with the use of informal currency deals. On the other hand, larger firms tend to have used official customer dealing at banks, implying that secured and convenient transactions could be a competitive edge for banks to absorb informal currency deals.
KeywordsCustomer dealing Informal currency deal Hysteresis Probit regression Myanmar
- Fafchamps, M. (2016). Formal and informal market institutions: Embeddedness revisited. Mimeo: Stanford University.Google Scholar
- IMF (International Monetary Fund) (2012). Myanmar: staff report for the 2011 Article IV consultation. IMF country report 12/104. Washington, DC: International Monetary Fund.Google Scholar
- IMF (2013). Myanmar: 2013 Article IV consultation and first review under the staff-monitored program. IMF Country Report No. 13/250. Washington, DC: International Monetary Fund.Google Scholar
- IMF (2014). Myanmar: 2014 Article IV consultation. IMF Country Report No. 14/307. Washington, DC: International Monetary Fund.Google Scholar