Efficiency Costs of Myanmar’s Multiple Exchange Rate Regime

Author/Editor:

Masahiro Hori ; Yu Ching Wong

Publication Date:

August 1, 2008

Electronic Access:

Free Full text (PDF file size is 943 KB).Use the free Adobe Acrobat Reader to view this PDF file

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

Myanmar's multiple exchange rate system creates various economic distortions. This paper describes the exchange rate practices in Myanmar, develops a model of foreign exchange markets, and presents the efficiency costs imposed by quasi-fiscal operation under the current exchange rate regime. The results of our model-based analyses indicate that the equilibrium exchange rate under the unified market could be at around K 400-500 per U.S. dollar, and using the equilibrium exchange rate (instead of the official exchange rate) as the accounting rate increases trade openness to more than 20 percent from less than 1 percent measured by official statistics. The total efficiency loss caused by the current multiple exchange rate regime is estimated at about 14-17 percent of GDP in 2006/07.

Series:

Working Paper No. 08/199

Subject:

English

Publication Date:

August 1, 2008

ISBN/ISSN:

9781451870572/1018-5941

Stock No:

WPIEA2008199

Price:

$18.00 (Academic Rate:$18.00)

Format:

Paper

Pages:

30

Please address any questions about this title to publications@imf.org