Myanmar Money

On Sunday, to pass the time while awaiting news from Naypyidaw, I decided to visit the Bogyoke Market, an enormous colonial era bazaar filled with antiques, jewelry, bolts of cloth, jade carvings, and Burmese handicrafts of every description – and the unofficial money changers, who chase after passing foreigners asking “change money?”

Myanmar has been isolated from the world community for decades. And since 2007, the country has lived under economic sanctions imposed by the UK, US, and EU in response to the former military government’s crackdown on pro-democracy demonstrators. One of the effects of this political isolation (which is just now lifting, along with the sanctions), is that the banking system is not integrated with the rest of the world. There are no ATMs. No one takes credit cards. No one accepts travelers checks. You have to carry around bricks of cash to pay for everything, including your hotel. And to make matters worse, hotels rates have tripled in price in the last few months with the influx of Western businessmen.

In the US, a $1 bill is worth one dollar, whatever its condition – provided it is not torn in half, and even then – with some judicious application of tape – the bill is still legal tender for all debts public and private. In Myanmar, the value of foreign currency depends on its condition and the amount of money you wish to exchange. Generally, the larger the denomination of the bill, and the better its condition, the better the rate offered. To get the official 850 kyats to the dollar exchange rate, you need to exchange at least one or more hundred dollar bills, in mint condition. No creases. No blemishes. No fold marks. No dog eared corners. No ink stains. Newly minted, crisp, perfect bills fresh off the printing press. The highest exchange rate I was able to get outside the airport was 830 Kyat to the dollar.

Basing the value of money on its condition is reminiscent of how money changers operated in the European Middle Ages. To increase the amount of currency in circulation, Medieval monarchs often decreased the amount of precious metal in their coins, while continuing to circulate them at face value. Additionally, “coin clippers” would shave off bits of metal from the edges of coins – pocketing the precious metal they accumulated – and then dump the now smaller coins back into circulation – again at full face value. Not surprisingly medieval money changers learned to ignore the face value of a coin and instead weigh it, study its edges, and then exchange it into local currency. Myanmar has come full circle.

At Bogyoke market, I met an old Burmese man with a scraggly white beard, who was carrying a bulging money purse. He offered me 830 kyat to the dollar, if I exchanged $100 US. I agreed. In return for the near perfect $100 bill I gave him, he counted out a stack of ragged 1,000 kyat notes so crumpled and worn that they feel like soft-ply kleenex. I complained in mock-seriousness that the Myanmar bills were in poor condition; therefore I should get a higher exchange rate. He got the joke and laughed good naturedly: “These bills are no problem!”