July 26, 2018 / 11:52 AM / 5 months ago

Myanmar's veteran central bank chief gets another term

YANGON, July 26 (Reuters) - Myanmar has decided to appoint the incumbent central bank governor for another term, despite the concerns of some in the financial community that the veteran official has not driven through much-needed banking reforms.

The Southeast Asian country’s parliament announced the appointment of Kyaw Kyaw Maung as chief of the Central Bank of Myanmar on Thursday, after his current five-year term ends on July 31.

Government spokesman Zaw Htay said Kyaw Kyaw Maung was chosen to continue in the role for his reliability, adding, “For this position, the main thing is one must have experience and one must not make many mistakes.”

Kyaw Kyaw Maung, 79, served in the same role under Myanmar’s military junta and was re-installed by then President Thein Sein, a retired general, during whose term the central bank received independence from the finance ministry in mid-2013.

Kyaw Kyaw Maung headed the central bank for a decade from 1997, under Myanmar’s notorious military regime that crushed political dissent and oversaw a failing economy. He was reappointed for a second stint in 2013.

When Nobel laureate Aung San Suu Kyi’s National League for Democracy (NLD) came to power in 2016 after a landslide election win, she disappointed banking and business leaders by standing by Kyaw Kyaw Maung, in what an adviser called a move to promote stability.

Suu Kyi is the de facto head of the civilian government, which shares power with the military under a 2008 constitution drafted by the generals.

At the time Kyaw Kyaw Maung was retained as governor in 2016, government advisers, central bank insiders, economists and banking executives told Reuters he had not driven reforms in the stunted banking sector, and pointed to his failure to stem some crises.

“The good thing is that he is an experienced person,” said Thet Thet Khine, a Lower House NLD lawmaker who also owns a jewellery business.

“On the other hand, this government only prioritises older people, so the next generation feel less confidence.”

Suu Kyi’s administration appointed 80-year-old former banker Soe Win as minister of planning and finance in May.

Few people were eligible for the role of central bank chief, said Than Lwin, a consultant at Myanmar’s Kanbawza Bank and a former deputy governor of the central bank.

“The NLD needs to choose a reliable and trustworthy person, and there are only a few to choose from,” he said.

The governor’s role should be forward-looking, said Aung Thura, chief executive of research firm Thura Swiss.

“The governor should not only be handling monetary policy, but also work for the development and stability of the banking sector and how new technologies can be used,” he added.

Reporting by Shoon Naing; Editing by Simon Lewis and Clarence Fernandez

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