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Workers count Myanmar's kyat banknotes at the office of a local bank in Yangon.   © Reuters
Economy

Myanmar moves to stave off credit crunch

New central bank regulations threaten to squeeze lending

STEVE GILMORE, Contributing writer and GWEN ROBINSON, Chief editor | Myanmar, Cambodia, Laos

NAPYITAW -- Myanmar's banking system is facing tough new regulations that could take more than $1 billion worth of local currency out of circulation, severely curtail lending and badly hurt the economy if a tight compliance deadline is not eased, senior bankers have warned.

The Central Bank of Myanmar published its first set of modern prudential regulations in July, in some cases replacing rules made nearly 30 years ago. Drafted with help from the International Monetary Fund, the regulations mark a significant step in bringing Myanmar into line with international standards. But critics warn that "unrealistic deadlines" for compliance could put some of Myanmar's 28 banks in jeopardy .

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