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Burma Stages First Free-Market Currency Auction

Workers count Burma's kyat banknotes at the office of a local bank in Rangoon, April 2, 2012.
Workers count Burma's kyat banknotes at the office of a local bank in Rangoon, April 2, 2012.

Burma has staged its first foreign exchange auction under a new system that sets the kyat currency free from its previously fixed rate.

The state-run New Light of Myanmar newspaper on Tuesday announced the managed float of the kyat, abandoning the peg of 8.5 kyat to the dollar.  Markets determined the rate Tuesday at 818 to the dollar.

The report said the rate will now be set by daily auction, and said the Central Bank reserved the right to periodically intervene to prevent large currency fluctuations.

The newspaper said the first foreign exchange auction was held Monday among 11 authorized private banks.  Three more licensed state-owned banks will be allowed to participate eventually.

Last week, the newspaper said the government will also work to unify the country's various exchange rates, as part of a host of reforms aimed at spurring the country's moribund economy.    

Some information for this report was provided by AP.

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