Myanmar’s central bank law explained

Myanmar’s central bank law explained

Author: Ashley Lee | Published: 1 Aug 2013

• Myanmar’s Central Bank Law establishes the central bank’s independence. Sources predict that will mean greater international openness as well as transparency;
• Rules for its implementation have not yet been notified. Therefore, details related to foreign – local bank JVs and measures for taking security over mortgages remain unclear;
• It is thought that the JVs will not benefit larger banks. However, smaller banks may look to foreign partners for greater capital and resources;
• Although this law does not directly affect the establishment of the Myanmar Stock Exchange, it may alter the macroeconomic situation and allow private companies to flourish.

The passage of the Central Bank Law signals Myanmar’s openness to international cooperation. But it may not provide the boost that foreign banks were expecting.

The Central Bank Law was signed by President Thein Sein on July 12. It designates the Central Bank of Myanmar as a politically independent entity, signaling Myanmar’s...