A draft law that will make the Central Bank of Myanmar independent could be enacted as soon as this week, members of parliament said.
The legislation was sent to the President’s
Office for review on July 3. If President Thein Sein does not call for
further revisions it will be enacted within one week of his office’s
receiving it as the Constitution stipulates, MPs said. A draft was first
submitted to the Pyidaungsu Hluttaw in April.
The lower house
then sent it to the President’s Office for comment, after which it was
revised, said MP U Ti Khun Myat, chairman of the lower house’s bill
committee. The revised legislation was brought before the hluttaw again
on July 1.“We amended a few details following the president’s comments,”
U Ti Khun Myat added, explaining that the wording of the legislation
was changed to ensure there was no ambiguity.
“We amended the law
to make it clear that the central bank can intervene in the money
market independently. The president’s comments did not oppose this,” he
said. Since it was announced last November the draft legislation has
passed the desks of the attorney-general, government and parliament.
The
first version,written by central bank staff, had 17 chapters with 116
sections. It was expanded to 18 chapters with 119 sections by MPs who
said they clarified the role of the central bank’s governor and made the
bank more autonomous in accord with international norms.
U
Bharat Singh, deputy director general of the central bank, said the most
recent draft is clearer and that it more carefully delineates the role
of the central bank’s board, which will allow it to more effectively
reform the money market. The main objective of the central bank law is
to stabilise prices and develop better payment systems, he added.
Once
enacted, the law will give the nine-member board of directors
independence to establish and implement monetary policy. Once it becomes
autonomous, the central bank will form new departments to supervise
financial institutions, conduct internal audits, oversee payments and
settlements, monitor financial markets, and manage the currency and
monetary policy.
It plans to nearly double its staff from the
current 1200 employees. The draft legislation also elevates the status
of the bank’s governor to that of a minister in the President’s Office. A
central bank spokesperson said staff were “not concerned” about when
the law would be enacted, but added they hoped it would be early this
month.
After the legislation is enacted, the central bank will
begin gradually implementing new procedures in its various departments,
the spokesperson said. The central bank’s lack of independence has been
cited by some as a reason for its apparent inability to control the
kyat’s exchange rate with the US dollar. Some have said that its daily
reference rate merely tracks the black market. A week ago the
black-market rate was about K1000 to the dollar while the central bank
rate was K959 to the greenback. By July 3 the official rate had climbed
to K975.
source: The Myanmar Times
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