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Strict measures keep boosting Myanm



Strict measures keep boosting Myanmar's kyat

YANGON, March 20 (Reuters) - Myanmar's (Burma's) kyat has continued to firm
following strict measures imposed by the military government to shield the
currency from the region's economic turmoil. 

The kyat, which hit all-time lows in December, has risen sharply against the
U.S. dollar and the dollar-denominated foreign exchange certificates (FEC). 

On Friday it was trading around 233 to the FEC and 250 to the dollar -- a
sharp difference from lows of 340 and 370, respectively, in late December. 

The currency's recovery comes after a series of strict measures were
implemented by the ruling State Peace and Development Council (SPDC) to stop
speculation and stop the kyat falling. 

The government began to warn major dealers against speculation, then in
January it revoked the licences of seven of the country's 30 FEC dealers,
apparently on charges of illegal currency speculation. 

Some other dealers suspended business for a while, giving various excuses. 

Since then the kyat began to rise as some panicked FEC and dollar holders
began to sell their bills, dealers said. 

The SPDC also suspended all border trade, sharply cut back on imports and
encouraged people to buy local products. 

Earlier this month the Central Bank of Myanmar revoked permission given to 10
semi-government and private banks to undertake foreign currency transactions.
No reason was given for the revocation. 

``The most panicking measure the government took recently was revoking
licences to operate foreign currency transactions,'' said one analyst. 

Even Myawadi Bank and Innwa Bank, both run by the economic wing of the
Ministry of Defence, had their licences revoked. 

All those who had foreign currency accounts with these banks had to transfer
their accounts to either the Myanma Foreign Trade Bank or Myanma Investment
and Commercial Bank. These are the only two banks now allowed to handle
foreign currency transactions and both are run by the finance ministry. 

``These measures were the basic immediate causes of the fall in demand and
rise in supply of the FECs and the dollar,'' an analyst said. 

``In the near future, the kyat will fluctuate...but within a narrow range,''
he said. ``Because the government will never allow the kyat to go out of
control.''