The International Monetary
Fund’s (IMF) recent warning about the growing
levels of private lending in Myanmar comes against the backdrop
of restrictions on domestic institutions. The Central Bank is
now catching up with international regulations.
Myanmar’s banking sector is
underdeveloped. Loans are typically short-term and require
specific types of collateral. The country’s banks
lack an interbank system to effect transfers, and are
dependent on cash inflows to fund their operations.
In a July 1 report, following the conclusion of its
Myanmar mission, IMF representatives warned that credit in the
private sector had grown rapidly; it observed a 36% increase
"The rapid liberalisation of the financial sector should be
carefully managed despite its overall benefits," said the
IMF’s Yongzheng Yang, following the mission.
"These potential risks could affect the economy, given weak
capacity and thin policy buffers."...