But for companies like Pepsi-Co, which earn revenue in kyat, it's become a major headache. To delay the inevitable devaluation and make its currency convertible, Burma introduced a dual currency system two years ago that uses foreign-exchange certificates pegged to the U.S. dollar. If state enterprises were to pay for imports at the market rate, the government would have to raise prices. Just how much impact devaluation will have remains unclear. But others argue devaluation will hit Burma hard.
Some economists advocate a partial devaluation.
Bringing the currency down to 65kyats to the U.S. dollar will restore confidence, they argue. But without the backing of multilateral institutions like the World Bank and the IMF, the government says investors will have to wait for another two years before the private sector is large enough and foreign-exchange reserves strong enough to devalue the currency. Mya Than, an economist at the Singapore's Institute of Southeast Asian Studies, agrees currency reform won't happen anytime soon.