Financial Reforms Seen in Myanmar

Myanmar's government is likely to allow foreign banks into the country by 2015 and to also give Myanmar's central bank more independence in setting rates, a senior official at Myanmar's biggest commercial bank said Friday, The Wall Street Journal reported. Myanmar's financial system remains primitive by international standards. The country only recently got its first ATMs, and credit cards aren't widely used. The country employs a confusing multiple-exchange-rate system, though Myanmar's government is widely expected to change that in favor of a single exchange rate soon, possibly as early as next month. U Than Lwin, deputy chairman of KBZ Bank and a former deputy governor of the Central Bank of Myanmar, said he also believes Myanmar's central bank will likely cut interest rates because rates in the country are higher than in neighboring Southeast Asian nations. The present deposit rate is 8%, he said, while lending rates are set at 13%. He didn't say exactly when he thought rates could go lower. Economists have long worried Myanmar's central bank lacks the independence necessary to manage a more robust and open economy, but steps to bolster the bank could resolve those concerns. Read more. (Subscription required.)