Historical Sketch

In the mid-16th century began the unification of the Burmese lands which had fallen under the rule of the neighboring countries and Portuguese colonists. The Burmese kingdom achieved a short-lived maximum with the conquest of Assam in 1817, just to lose the same Assam and other lands to the British in the First Anglo-Burmese War of 1826. Lower Burma was lost to Britain in the Second War of 1852, and the rest of the country followed the same fate in the Third Anglo-Burmese War of 1885. Beginning of 1886, the Burmese monarchy was abolished, and the country was integrated into British India. In 1937, Burma got carved out of British India and was constituted as separate crown colony. During World War II, Burma was occupied by Japan, which ceded the southern parts to its ally Thailand. The restoration of British rule after the Japanese defeat was only short-lived. In the wake of the Indian independence of 1947 Burma attained its independence in January 1948. In 1989, the country’s international name was changed to Myanmar, which did not take hold until the 2000s due to the country's political isolation.

Monetary History Overview

Traditionally, the Burmese economy has been based on silver. In transactions bullion was used, in the northern Arakan region silver coins were produced under Indian influence. In 1865, a mint opened in the capital city Mandalay and started producing silver coins in the standard the Indian Rupee. The denomiation was in the Kyat weight standard which, however, would have been 29% heavier. In addition, subsidiary coins in copper and lead and golden presentation pieces were produced by the mint. The third British campaign of 1885 annihilated the independent state, and Burma got integrated into British India. The Indian Rupee was introduced in December of the same year, the silver coins of the former independent state were tolerated until March 1892. In 1937, Burma was separated from India and became a crown colony of its own. The Indian Rupee remained current. In 1942, Japan conquered Burma and expelled the British. The military administration introduced the Japanese Military Yen in May 1942, like it was the case for all the conquered territories, the denomination of the occupation notes being "Rupee". From 1943 onwards, all Japanese possessions were integrated into the economic area of the so-called "Southeast Asian Sphere of Co-prosperity". The Indian Rupee remained in circulation and was traded at par, which corresponded to a devaluation by more than 22%. After the Japanese defeat in September 1945, the pre-war currency was restored. The occupation notes were declared invalid without compensation. In April 1947, one year before independence, Burma established a currency board and separated from the Indian currency. The Burmese Rupee was still at par with the Indian Rupee. In July 1952, the interim Burma Currency Board was succeeded by the Union Bank of Burma, created a few years earlier. At the same time the national currency was renamed into Myanmarese (Burmese) Kyat and decimalized. Myanmar (Burma) did not follow the Indian devaluation of 1966, and the Kyat repegged to the US Dollar. In January 1975, the Kyat got devalued by 23% and the peg switched to the IMF Special Drawing Rights (SDR) unit. Except for a small adjustment in 1977, the official exchange rate remained unchanged until 2012. Since the early 1980s, official effective rates came into use as the official rate was de facto inoperative. In April 2012, the Kyat official rate was abolished. The switch to the floating market rate corresponded to a nominal 99.5% devaluation. Since then, the Kyat has continued to depreciate.

Myanmar (Burma) joined the International Monetary Fund (IMF) on 03.01.1952.

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