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Burma's currency falls to new recor
- Subject: Burma's currency falls to new recor
- From: nin@xxxxxx
- Date: Tue, 11 Nov 1997 04:04:00
Burma's currency falls to new record low against the dollar
RANGOON, Burma (AP) _ Burma's currency, the kyat, has fallen to
new record lows against the U.S., dealers in Rangoon reported
The dollar was fetching between 278 and 284 kyat from money
changers using the unofficial rate. The government maintains an
official rate of about 6 kyats to the dollar, but it is only used
for state enterprises. Nearly all other business is conducted at
the unofficial rate.
Dealers in Rangoon cited the fall of neighboring Thailand's
currency, the baht, as the cause of the kyat's decline. Under
attack from speculators, Thailand floated its currency on July 2,
and it has since lost about 40 percent of its value against the
Thailand and Burma conduct a large degree of cross-border trade,
and so currency dealers frequently hold baht in addition to the
more widely-used U.S. dollar.
Reports have come out of border areas in recent months of the
kyat trading at about 300 to the U.S. dollar. The borders areas,
with their volatile mix of ethnic groups and some insurgents, are
not as tightly controlled by the military government.
The kyat has been declining in large spurts since 1996, well
before the currency crisis hit Southeast Asia. Burma's currency is
considered worthless in international trading, and so is not
subject to speculative attacks from institutional investors abroad.
Analysts in Rangoon told The Associated Press in Bangkok, that
while the Thai currency's decline is a factor in the fall of the
kyat, other elements are also contributing to its loss of value.
Included in the mix are the military government's plummeting
foreign reserves and weak exports. Recent flooding has destroyed a
significant portion of the rice crop, although no accurate numbers
detailing the damage had yet been made available by the government.
Largely undeveloped because of a period of socialist
isolationism that lasted from 1962-88, Burma's economy is mainly
based on agriculture, with rice being a significant export, as are
beans and pulses and timber.
Although the government has been courting foreign investors,
manufacturing accounts for less than 7 percent of gross domestic
Last April, the U.S. slapped economic sanctions on Burma's
military regime for its suppression of the country's democracy
movement and its alleged failure to curb exports of drugs, chiefly
opium and heroin.
Burma depends on its Asian neighbors for most foreign
investment, but with economic troubles roiling across the
continent, analysts say the regime may have to expect less help and
investment from its neighbors than it had hoped for.
Although the unofficial rate is the one most commonly used in
Burma it is only offerd by money changers who operate outside the
Earlier this year, when the kyat fell to about 260 to the dollar
for a week or so, the military government detained several money
changers for questioning.
They were later released and no charges were filed against them.
No detentions of money changers have been reported since that time.
110713 nov 97