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Concluding Chapter: Prospects for Modernizing the Foreign Exchange Market

  • Koji KuboEmail author
Chapter

Abstract

We characterize Myanmar’s forex market as the twofold prevalence and diversity of informal currency deals. Prevalence adds to the liquidity of the unofficial market and reinforces its competitiveness. Diverse informal currency deals include those embedded in the country’s informal economic activities on which effective controls have not been implemented. Given these two features, lifting exchange restrictions would not suffice to eradicate the unofficial market. Resulting low liquidity of the official market runs counter to forex market modernization which requires a concentration of currency deals in authorized dealer banks. We present possible scenarios for raising the liquidity of the official forex market, with a focus on the roles of informal brokers and foreign bank branches.

Keywords

Market liquidity Forex market modernization Informal broker Foreign bank Myanmar 

References

  1. IMF. (1999). Exchange rate arrangements and currency convertibility: Developments and issues, World Economic and Financial Surveys. Washington, DC: International Monetary Fund.Google Scholar
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  3. Nehru, V. (2015). Developing Myanmar’s finance sector to support rapid, inclusive, and sustainable economic growth. ADB economics working paper series No. 430. Manila: Asian Development Bank.Google Scholar
  4. Turnell, S. (2009). Fiery Dragon: Banks, moneylenders and microfinance in Burma. Copenhagen: NIAS Press.Google Scholar

Copyright information

© IDE-JETRO 2018

Authors and Affiliations

  1. 1.Institute of Developing Economies, Japan External Trade Organization (IDE-JETRO)ChibaJapan

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