Myanmar currency instability could hit NLD's agenda

Subject

Currency and economic stability.

Significance

Myanmar's National League for Democracy (NLD) takes office on April 1. However, recent kyat volatility underscores the importance of maintaining macroeconomic stability as investors often regard a currency's relative performances as a proxy for the health of the underlying economy and the calibre of its management.

Impacts

• Currency shifts will make it hard for Myanmar importers to budget for purchasing economic inputs, with cost over-runs possible.
• Businesses working in kyats will face fluctuating demand as the currency shifts.
• Further kyat volatility will make consumers reluctant to stop using dollars.