Tuesday, July 29, 2008

U.N. reports losses due to Myanmar exchange rate

Currency exchanges have cost the world body about $10 million as it supplies aid to cyclone victims, the humanitarian chief tells reporters.
From Reuters
July 29, 2008

UNITED NATIONS -- The top U.N. humanitarian affairs official said Monday that the world body had suffered significant losses while delivering cyclone aid to Myanmar because of a distorted official exchange rate.

This month, the United Nations issued an appeal for more than $300 million in extra aid to cope with the effects of Cyclone Nargis, which left about 140,000 people dead or missing when it struck the Irrawaddy delta region in early May.

Humanitarian affairs chief John Holmes told reporters that the United Nations has lost about $10 million in currency exchanges so far as it pays for goods and services in Myanmar.

"We were arguably a bit slow to recognize . . . how serious a problem this has become for us," Holmes said, adding that the spread between the market and official rates widened suddenly in June.

"It's not acceptable," he added.

The market rate for the local currency, kyats, is around 1,100 per dollar but the U.N. rate is around 880, according to the Inner City Press, a blog that covers the United Nations and first raised the currency exchange issue.

Holmes, who spoke at the United Nations after returning from a trip to the Irrawaddy River delta, said relief efforts were improving, with almost everyone affected by the cyclone now having been reached with items such as food or materials for shelter.

A revised appeal for aid of $482 million had raised about $200 million so far, he said, adding that initial indications from donors were "quite positive."

He later said he was not aware of any countries refusing to contribute because of the currency loss but that donors were only just realizing the extent of the problems.

Inner City Press reported last week that the military government in Myanmar, also known as Burma, had changed the official exchange rate since the cyclone struck.

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