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Deposit dollarization in Myanmar

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  • Kubo, Koji

Abstract

Myanmar has peculiar conditions of deposit dollarization that were shaped by administrative controls. On the one hand, restrictive controls encouraged the accumulation of foreign currency deposits (FCD). On the other hand, foreign currency loans (FCL) were not practiced officially; therefore, FCD was not utilized for credit. Given the adverse effects and persistence of dollarization in other dollarized economies and the recent recovery of local currency deposits in Myanmar, this paper opts for the prohibition of FCL and offers policy measures for de-dollarization.

Suggested Citation

  • Kubo, Koji, 2014. "Deposit dollarization in Myanmar," IDE Discussion Papers 473, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    • Handle: RePEc:jet:dpaper:dpaper473
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    References listed on IDEAS

    as
    1. Ize, Alain & Yeyati, Eduardo Levy, 2003. "Financial dollarization," Journal of International Economics, Elsevier, vol. 59(2), pages 323-347, March.
    2. International Monetary Fund, 2013. "Myanmar: 2013 Article IV Consultation and First Review Under the Staff-Monitored Program," IMF Staff Country Reports 2013/250, International Monetary Fund.
    3. International Monetary Fund, 2013. "Nicaragua: Staff Report for the 2013 Article IV Consultation," IMF Staff Country Reports 2013/377, International Monetary Fund.
    4. Koji Kubo, 2013. "Myanmar's two decades of partial transition to a market economy: a negative legacy for the new government," Post-Communist Economies, Taylor & Francis Journals, vol. 25(3), pages 357-370, September.
    5. Eduardo Levy Yeyati, 2006. "Financial dollarization: evaluating the consequences [‘A simple model of monetary policy and currency crises’]," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 21(45), pages 62-118.
    6. Mr. Guillermo Calvo & Mr. Carlos A. Végh Gramont, 1992. "Currency Substitution in Developing Countries: An Introduction," IMF Working Papers 1992/040, International Monetary Fund.
    7. International Monetary Fund, 2013. "Myanmar: Staff-Monitored Program," IMF Staff Country Reports 2013/013, International Monetary Fund.
    8. Jayant Menon, 2008. "Dealing with multiple currencies: what options for the transitional economies of Southeast Asia?," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 13(2), pages 131-146.
    9. Masahiro Hori & Yu Ching Wong, 2013. "Costs of Myanmar's multiple exchange-rate regime," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 22(2), pages 209-233, March.
    10. International Monetary Fund, 2001. "Myanmar: Statistical Appendix," IMF Staff Country Reports 2001/018, International Monetary Fund.
    11. Kubo, Koji, 2012. "Trade policies and trade mis-reporting in Myanmar," IDE Discussion Papers 326, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    12. International Monetary Fund, 2013. "Mexico: Staff Report for the 2013 Article IV Consultation," IMF Staff Country Reports 2013/334, International Monetary Fund.
    13. Nicolo, Gianni De & Honohan, Patrick & Ize, Alain, 2005. "Dollarization of bank deposits: Causes and consequences," Journal of Banking & Finance, Elsevier, vol. 29(7), pages 1697-1727, July.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Myanmar; Foreign exchange; Monetary policy; Dollarization; Foreign currency deposits; Foreign currency loans;
    All these keywords.

    JEL classification:

    • E41 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Demand for Money
    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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