01 March 2013

Travel Tip: Currency Exchange in Burma

Kyat Attack
© Ryan Goebel
The currency in Burma is known as the Kyat, which when pronounced sounds more like "chat".

Pretty much every guidebook, travel blog, or message board post will tell you not to exchange money at any official currency exchange location (airports, banks, hotels, etc.).  Rather, they'll tell you to exchange your money on the black market, which involves approaching some shady characters on street corners, in public parks, or in traditional markets.

Let me tell you, Burma is a country that is changing at a very rapid pace, and this "common" travel advice is now outdated and irrelevant.
From 2001 to early 2012, the official exchange rate set by the Burmese government was usually around 6 kyat per one US dollar.  However, you could easily find a man on the street that would give you a rate more on the order of 1000 kyat per dollar, which was closer to what kyat were actually worth in real world financial markets.  One of the great mysteries of this whole situation was where did these black market guys get the currency in the first place and how are they able to sell it at rate that was so different from the official bank rate. 

When I traveled to Burma last October, I was still under the impression that the black market was the place where all money should be exchanged.  Nonetheless, I decided to have a quick look at the Yangon airport exchange rate while I was waiting for my luggage to arrive on the carousel.  I was surprised to see that it was listed as 850 kyat to the dollar.  Staring at the sign in disbelief, I decided to exchange some dollars there so I'd have some kyat to start out my journey since I was short on small denomination US dollar bills.

Walking down the street from my Yangon hotel later that day, I was approached by more than one guy offering me to exchange money.  Each time, I'd ask him what his rate was, just so I could verify that the black market wasn't suddenly 10,000 kyat per dollar.  But they'd always be in the range of 840 to 855 kyat. 

In the end, I ended up exchanging all of my money at Burmese airports, and I'd recommend you do the same.  Personally, I don't fully trust the guys on the street.  You have to be much more careful counting the money they give you, just in case they either miscount or slip some smaller notes into a stack of larger denomination notes.  Also, counting out a stack of money on a public street is never a wise thing to do, regardless of the country you're in.

After returning home from my trip, I discovered that the Burmese central bank decided to allow the kyat's value to be determined by a managed float system in April 2012.  This allows actual market conditions to determine the kyat's value, keeps it in line with the black market rate, and encourages foreign investment in the country.

For more information about the change to the managed float system in Burma, click here.

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