U.N officials say they have resolved a problem with skewed official exchange rates that led to U.N. losses of more than $1.5 million in the delivery of aid to survivors of Cyclone Nargis in Burma.

U.N. officials said Monday Burma's military government had agreed to let outside donors pay local companies directly in dollars rather than via the official system involving foreign exchange certificates.

Officials also said Burma will waive a 10 percent government transaction fee for all international humanitarian agencies.

The U.N. losses stemmed from Burma's insistence that donors convert aid dollars into foreign exchange certificates with a value of $1 each.  These certificates were then used to buy the local currency, the kyat.

However, the exchange rate for the certificates is 20 percent lower than the market rate.