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Last year the reformist head of China’s central bank convinced his Communist party bosses to give market forces a bigger say in setting the renminbi’s daily “reference rate” against the US dollar. In return, Zhou Xiaochuan assured his more conservative party colleagues that the redback would finally secure coveted recognition as an official reserve currency […]

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Carney: UK is ‘investment banker for Europe’

The governor of the Bank of England has repeated his calls for a “smooth and orderly” UK exit from the EU, saying that a transition out of the bloc will happen, it was just a case of “when and how”. Responding to the BoE’s latest bank stress tests, where lenders overall emerged with more resilient […]

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China stock market unfazed by falling renminbi

China’s renminbi slump has companies and individuals alike scrambling to move capital overseas, but it has not damped the enthusiasm of China’s equity investors. The Shanghai Composite, which tracks stocks on the mainland’s biggest exchange, has been gradually rising since May. That is the opposite of what happened in August 2015 after China’s surprise renminbi […]

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Capital Markets

Mnuchin expected to be Trump’s Treasury secretary

Donald Trump has chosen Steven Mnuchin as his Treasury secretary, US media outlets reported on Tuesday, positioning the former Goldman Sachs banker to be the latest Wall Street veteran to receive a top administration post. Mr Mnuchin chairs both Dune Capital Management and Dune Entertainment Partners and has been a longtime business associate of Mr […]

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Financial system more vulnerable after Trump victory, says BoE

The US election outcome has “reinforced existing vulnerabilities” in the financial system, the Bank of England has warned, adding that the outlook for financial stability in the UK remains challenging. The BoE said on Wednesday that vulnerabilities that were already considered “elevated” have worsened since its last report on financial stability in July, in the […]

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Categorized | Currencies

Myanmar launches new currency system

Posted on March 31, 2012

YANGON, March 31 – Myanmar will hold the first auction on Monday under a new currency regime that aims to unify its multiple exchange rates, a senior banker said, outlining the country’s boldest economic reform yet after years of isolation.

The Central Bank of Myanmar has published little so far about the new system. It has announced the new managed float would take effect from Sunday, April 1, when commercial banks are closed.

“April 2 will be the first day of the auction,” the banker told Reuters, declining to be named because he was not authorised to speak to the media.

The Central Bank of Myanmar is expected to announce a reference rate for the kyat against the dollar at around 9:30am on Monday (0300 GMT), the banker said.

The rate will be set after it receives bids from banks in Myanmar. Banks will then be allowed to buy and sell the currency in a trading band 0.8 per cent either side of the reference rate.

The new rate is expected to be floated near the recent black market range of 800 to 820 kyat per dollar, which is already used for most transactions in the country.

An official rate of around 6.4 kyat to the dollar has been used in the past by the government and some state firms, although the budget for the fiscal year starting April 1 was set using a rate of 800.

The kyat’s unofficial rate has jumped from more than 1,000 per dollar in 2009 as foreign money has flowed into the timber, energy and gem sectors. That has hurt a swath of Burmese, from farmers and manufacturers to traders and employees of foreign firms paid in dollars.