By Richard Giedroyc, World Coin News March 16, 2010

Most people living outside Myanmar would agree the Southeast Asian nation is living in the dark ages.

Faced with a critical currency shortage the nation known formerly as Burma is proving this to be true, with a barter economy quickly displacing a cash economy due to an extreme shortage of bank notes coupled with virtually no coins in circulation.

Myanmar is a backward country ruled by a repressive military junta government. Although officially its kyat currency is valued at 5.5 to the U.S. dollar, in fact domestic consumer prices rose by an average of 24 percent a year between 2005 and 2009, according to a Feb. 10 Reuters news agency report.

Debit and credit cards don’t exist. Checks are seldom accepted. Although the government announced a new issue of 50- and 100-kyat coins would be released in late 2008 none are seen in circulation. Low denomination bank notes are in short supply and typically circulate in ragged condition, while according to Reuters and other reporting agencies it now appears the government has ceased printing even the highest denomination 5,000-kyat bank note.

Myanmar has not released data on the amount of money in circulation since fiscal year 1996-1997, when the amount in circulation was valued at 179.82 billion kyat. A Reuters request for more recent data met with the official response, “We cannot tell you. It’s a state secret.”

“Officially there are 13 denominations of notes in circulation – starting from 50 pya (one cent) up to 5,000 kyat. But only the three big notes (200, 500 and 1,000 kyat) are common. The rest are growing scarcer by the month,” Reuters reported.

A March 8, 2009, “Today in Myanmar” story stated, “Coins are extremely rare to find in Myanmar. The rarity of coins makes it a collector’s item as many street vendors in Yangon try to sell these coins and old kyat notes to foreigners.”

According to late 2008 Myanmar newspaper reports, the 50- and 100-kyat coins nobody seems to ever see each depict the traditional Burmese lion on the obverse, with the Naypvidaw Lotus Fountain on the reverse of the 50 kyat and the denomination value on the reverse of the 100 kyat. The 50 kyat is composed of copper, while the 100 kyat is composed of copper-nickel.

Regarding the notes in circulation, “Today in Myanmar” says: “One thing that strikes you when you arrived to Myanmar is the old, dirty, and worn out currency notes. Most small value kyat notes are very old, extremely dirty, and totally worn out with a lot of tears.”

The 5,000-kyat denomination was introduced Oct. 1, 2009, by the Central Bank of Myanmar, but the new denomination was met with cynicism rather than being welcomed. Although some people found it easier to carry one large denomination note rather than a sack of small denomination notes, others saw it as nothing more than fuel for inflation. The local black market reacted with an increase in the value of the dollar against the kyat.

According to “Today in Myanmar,” “The only way to buy things in Myanmar is to carry a large bag full of 1,000-kyat notes. To buy a car or a land you will have to carry a large bag full of currency notes, and it will take eternity to count all the money. Sometimes business people carry money in large plastic or cloth bags, a kind of bag used to carry things in supermarkets or in shops.”

The Feb. 10 Reuters report added, “In Sittwe, the capital of [the] western Rakhine state, teashop owners manufacture their own coupons to use as currency.”

Reuters quoted teashop owner Ko Aung Knine as saying, “It’s far more convenient to use these self-circulated notes instead of small items,” adding, “but you need to make sure coupons can’t be forged. Mostly we use a computer to print it with the name of the shop, face value, and signature of the shop owner.”

There have been reports that in the city of Yangon 100 kyat (about 10 cents US) in value is being bartered for a sachet of coffee mix or for a small container of shampoo, while a single cigarette, a piece of candy, or a packet of tissues may be bartered for 50 kyat (about 5 cents US) in value.

Money in modern Myanmar has been unusual for some time. During the socialist era bank notes were outlawed. On Nov. 10, 1985 it outlawed the 50- and 100-kyat bank notes, eventually allowing these denominations to be exchanged for new notes in the unwieldy denominations of 15, 25, 35, 45, and 75 kyat. Two years later these newer notes were outlawed, this time without any opportunity being given to exchange the existing notes for newer notes in denominations of 45 and 90 kyat. This was one of the reasons for the popular uprising of 1988 that ousted that government.

Today it appears the government has simply stopped printing bank notes while not bothering to explain why the announced coins have never materialized. An unnamed “retired economist from Yangon University” told Reuters, “So far as I know, they [Central Bank of Myanmar] print only 1,000 kyat notes now. The cost of printing is far higher than the face value of most small notes ... so they now print just the biggest ones.”



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