Myanmar seeks to boost investor confidence through independent central bank launch
As part of reforms, Central Bank of Myanmar will shift its policy focus to adjusting underlying demand for and supply of bank reserves via open market operations and deposit auctions. June 12, 2013 | Magessan RajAs Myanmar continues to bolster efforts to attract foreign investment into the country in a bid to accelerate economic growth, the domestic government’s recent announcement, promising a revamp and independence to the Central Bank of Myanmar, will serve as welcome news to many. According to Khin Saw Oo, deputy director general of the central bank’s regulation and anti-money laundering divison, the new central bank will be empowered to adjust monetary conditions independently, stopping it from financing the government’s debts, with the country’s president Thein Sein expected to sign the new central bank law before the end of the current parliamentary session which concludes at the end of July 2013. Currently, the Central Bank of Myanmar falls under the jurisdiction of the finance ministry, which holds significant clout over formation of monetary policies, and instructs the bank to print money to pay off its debts – a move that could spark rampant inflation. The new law will put a stop to this, with Khin saying that the central bank will gradually reduce the proportion of the government’s deficit that it directly finances to zero from around 40% and gain power to set interest rates independently. As part of reforms, the government will dissolve the central bank’s current leadership structure and replace it with a nine-member board chaired by the central bank governor, consisting of three other central bank executives as deputy governors and five non-executives from other professions. Board members will be nominated by the president’s office but parliamentary approval will be required. Under the board, there will be four committees in charge of monetary policy, financial stability, payment systems and foreign-exchange management. The monetary-policy committee will be headed by one of the deputy governors and staffed by other members of that department, while the International Monetary Fund ... Please login to read the complete article. If you already have an account, you can login now or subscribe/register.
Categories: Capital & Strategic Issues, Regulation, Risk and RegulationCapital & Strategic Issues,riskregulation,Risk and Regulation, Capital & Strategic Issues,Regulation,Risk and Regulation, Keywords:Central Bank Of Myanmar, Khin Saw Oo, IMF Central Bank of Myanmar, Khin Saw Oo, IMF
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