Monetary Policy Framework in Myanmar: Overview and Challenges

Abstract

Myanmar has achieved high economic growth since its transition from military rule to civilian government in 2011, benefiting from the development assistance provided by international organizations such as the International Monetary Fund, as well as donor countries including Japan. This paper first discusses how the monetary policy framework has evolved in Myanmar, making the best use of such assistance. Then it explores how the central bank responded to the economic shock caused by COVID-19, and what challenges the central bank faces in the coming periods to further develop its monetary policy framework.

The situation in Myanmar after the military coup on February 1, 2021 is uncertain, carrying the risk of a backlash against the financial development achieved so far. The analyses in this paper are basically built upon conditions observed in the period until right before the coup.