Customer's wave paper forms to get the attention of the harassed clerks who must hand-process each document because the bank lacks computers. But on the street outside the bank, blackmarket dealers quickly buy and sell kyat. It's not just the speed of these transactions that frustrates bank customers. At the official rate of 6.2 kyats to the U.S. dollar versus 110-120 kyats on the black market, Burma's failure both to devalue its currency and make it fully convertible into other currencies has become a major obstacle to foreign investment, trade and overall economic growth. The government fears devaluation will raise prices and push up inflation.
Investors regard the system as unworkable for most major projects.
At the market rate, however, he would have to contribute 1.1 billion kyat. What's more, while it's possible to buy anything with dollars, it's illega to convert those dollars into kyat or vice versa at anything other than the official rate. Problem is, the government doesn't have the foreign exchange to convert kyat into dollars. Officials contend that the parallel exchange rate isn't a problem. That's true if investors are exporting from Burma.