Myanmar: US suspends some sanctions; central bank to weaken currency; ASEAN banks allowed in by 2014

Updated On: May 18, 2012

The United States has suspended some financial sanctions on Myanmar, and has nominated a new ambassador to the country. In other news, Myanmar's central bank wants to weaken the newly floated currency, and has confirmed that ASEAN banks will be able to form joint ventures in Myanmar by 2014, earlier than expected. Finally, reports say Myanmar President Thein Sein is unwell, but an adviser told the media it is not serious.

US Suspends Sanctions, Appoints Ambassador

The suspension of some US sanctions will allow the first major investments by American corporations in Myanmar in decades. President Barack Obama said the steps signified his recognition of the dramatic political changes in Myanmar, also known as Burma, over the past year.

"As an iron fist has unclenched in Burma, we have extended our hand, and are entering a new phase in our engagement on behalf of a more democratic and prosperous future for the Burmese people," Mr. Obama said on Thursday.

"Today we say to American business: invest in Burma and do it responsibly," said Secretary of State Hillary Clinton said after meeting at Myanmar's foreign minister, U Wunna Maung Lwin, at the US State Department.

The White House also said that Derek Mitchell, an academic and diplomat, has been tapped to be Washington's first ambassador to Myanmar in 22 years.

However, US officials stressed that the Obama administration has not formally lifted sanctions on Myanmar. Instead, it has suspended them for now, to ensure the country does not backtrack on its reforms. The US is maintaining its arms embargo, and the US Treasury Department is maintaining and updating its list of sanctioned Myanmar military companies, business tycoons and generals.

Report: U.S. Eases Myanmar Financial Sanctions [Wall Street Journal, 18 May 2012]

Myanmar Wants to Weaken Currency, Will Open to ASEAN

Myanmar's central bank wants to weaken its newly floated currency and prevent further rises that could derail reforms to its economy, a deputy central bank governor said. Mr. Nay Aye, one of two deputy governors, said the central bank is developing a fund for carrying out open-market operations and stabilizing the currency.

"In the near future there will be a massive inflow of foreign direct investment, and as a result Myanmar's kyat is expected to appreciate. We will do our best to prevent this," he told Reuters in an interview.

He added that foreign banks will be able to form joint ventures in Myanmar by 2014, a year earlier than expected. In 2014, banks from countries in ASEAN will be allowed in, with banks from other countries following afterwards.

"The ASEAN integration process requires allowing qualified banks from ASEAN to open branches in the country with effect from 2014. We are doing our best to be able to fulfill this requirement," Mr. Nay Aye said. "Especially we are thinking of allowing joint-ventures with foreign banks and branches of foreign banks."

In 2015, the ten ASEAN members are scheduled to form an ASEAN Economic Community, creating a common market and production base.

Report: Myanmar's central bank aims for weaker currency [Reuters, 18 May 2012]

Myanmar President Thein Sein Not Feeling Well

In other news, Myanmar’s President Thein Sein is unwell. On Friday, reports said he was resting at his home in Yangon, and military doctors have paid a house call. But a presidential adviser told the Associated Press that his condition was “nothing to worry about", and said he was probably exhausted from his heavy workload.

The health of a leader is a sensitive topic in Myanmar and is typically not officially discussed. However the 67-year-old leader is known to have a heart condition and reportedly traveled to Singapore earlier this year for a new pacemaker.

Since taking office in March 2011, Mr. Thein Sein has become a critical driving force behind the country's reforms.

Report: Myanmar President Thein Sein not feeling well, officials say; 67-year-old has heart condition [Washington Post (AP), 18 May 2012]

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