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Mr. Simon T Gray
Some central banks have maintained overvalued official exchange rates, while unable to ensure that supply of foreign exchange meets legitimate demand for current account transactions at that price. A parallel exchange rate market develops, in such circumstances; and when the spread between the official and parallel rates is both substantial and sustained, price levels in the economy typically reflect the parallel market exchange rate. “Recognizing reality” by allowing economic agents to use a market clearing rate benefits economic activity without necessarily leading to more inflation. But a unified, market-clearing exchange rate will not stabilize without a supportive fiscal and monetary context. A number of country case studies are included; my thanks to Jie Ren for pulling together all the data for the country case studies, and the production of the charts.
International Monetary Fund. Asia and Pacific Dept

Abstract

The coronavirus disease (COVID-19) pandemic is still unfolding around the globe. In Asia, as elsewhere, the virus has ebbed in some countries but surged in others. The global economy is beginning to recover after a sharp contraction in the second quarter of 2020, as nationwide lockdowns are lifted and replaced with more targeted containment measures.

International Monetary Fund. Monetary and Capital Markets Department
At the request of the Central Bank of Myanmar (CBM), the IMF’s Monetary and Capital Markets Department, visited Yangon for a series of missions in 2018 and early 2019 on banking supervision. The objectives of the work were to support the CBM in the development of bank regulation and supervision, its introduction of a more risk-based approach to supervision. The Guide to Risk-Based Supervision sets out approaches to risk assessment and risk mitigation based on international practices. The key risks identified in the Myanmar context include legal, regulatory and reputational risk, strategic risk and group and related parties’ risk as well as credit, market, operational, and liquidity risks. The CBM is implementing the new approach over the period until 2020. While perfecting a complete risk-based approach will take years, the CBM is committed to implementation and is already undertaking risk assessments using the new risk matrix tool as examinations come due.
International Monetary Fund. Asia and Pacific Dept
This 2019 Article IV Consultation focuses on Myanmar’s near- and medium-term challenges and policy priorities and was prepared before COVID-19 became a global pandemic and resulted in unprecedented strains in global trade, commodity and financial markets. It, therefore, does not reflect the implications of these developments and related policy priorities. These developments have greatly amplified uncertainty and could heighten downside risks around the outlook. The IMF staff is closely monitoring the situation, including related policy responses from the authorities, and will continue to work on assessing its impact in the Myanmar economy. Although long-term prospects remain favorable, near-term growth is likely to remain below potential as the correction in real estate market and continued uncertainty weighs on investor sentiment in the runup to the 2020 elections. Starting FY2020/21, bank deleveraging will further slow credit and constrain gross domestic product growth as borrower’s true ability to repay is revealed with term loans coming due and banks restructure in earnest.
International Monetary Fund. Statistics Dept.
This Technical Assistance (TA) report on Myanmar presents outcomes and priority recommendations of mission on external sector statistics (ESS) for the Directorate of Investment and Company Administration (DICA). Intensive hands-on training provided to the DICA through peripatetic TA missions have effectively contributed to building up capacity for DICA compilers, which have gradually materialized and translated into successful foreign direct investment surveys (FDIS) conducted last year. Data coverage has significantly improved through inclusion of FDI in oil and gas sector, which is one of the largest FDI recipients for Myanmar. In order to further enhance the coverage of Myanmar’s FDI statistics, the mission advised the DICA to extend the coverage of FDIS to incorporate new companies and FDI in power generation sector. The mission also assisted DICA officials in updating the annual FDIS survey forms, making alterations to the previous year’s survey forms to capture additional information as requested by DICA management.