March 31, 2012 / 9:13 AM / 7 years ago

Myanmar launches new currency system Monday: bank source

YANGON (Reuters) - 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 (CBM) has published little so far about the new system. It has announced the new managed float would take effect from April 1, which is a Sunday, 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 authorized 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 9:30 a.m. 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 percent 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 swathe of Burmese, from farmers and manufacturers to traders and employees of foreign firms paid in dollars.

Reporting by a Reuters staff reporter; Editing by Alan Raybould and Ed Lane

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