Efficiency Costs of Myanmar’s Multiple Exchange Rate Regime

 
Author/Editor: Hori, Masahiro ; Wong, Yu Ching
 
Publication Date: August 01, 2008
 
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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(s): Exchange rate regimes | Myanmar | Multiple exchange rates | Exchange markets | Economic models | Trade models | National accounts | Gross domestic product | Exports | Imports

Author's Keyword(s): Multiple Exchange Rate | Exchange Rate Unification | Efficiency Analysis
 
English
Publication Date: August 01, 2008
Format: Paper
Stock No: WPIEA2008199 Pages: 30
Price:
US$18.00 (Academic Rate:
US$18.00 )
 
 
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