Like many countries in South-East Asia, Myanmar does not have just one official currency. The local currency is called kyat, but US$ are also accepted. Additionally, the Myanmar government issues monopoly-like FECs (Foreign Exchange Certificates) printed in China to be used as an equivalent to the US$. Each visitor arriving in Myanmar is supposed to buy 200 FECs with hard currencies such as US$, €, or UK£. This is in theory at least, since a couple may substantially reduce this amount by giving a small present of five to ten US$ to the clerks at the exchange booth.
Using US$ is actually practical and straightforward since the largest kyat bank note (at the moment that is the 1000 kyat bill) amounts to less than one US$. It gets tricky when FECs have to be considered. Officially, all hotels and entrance fees to major attractions must be paid in US$ or FECs, but many hotels also accept kyat. The official exchange rate between kyat and US$ or FECs is so ridiculously low that moneychangers on the black market are booming. Officially, one FEC is equal to one US$ and anyone accepting US$ also has to accept FEC [let's call this axiom A1]. The black market, however, sees things a little differently. At the time we exchanged US$ into kyat, one US$ was worth 1060 kyat in a transaction of a single 100 dollar bill [axiom A2]. One FEC, however, was worth about 100 kyat less [axiom A3]. If kyat needed to be exchanged back into US$ or FEC, the rate was about 50 kyat higher, i.e. 1110 for US$ and 1010 for FEC [axiom A4]. Consequently, the following highly interesting equation can be deduced:
using A2: 1 US$ = 1060 kyat
using A4: 1060 kyat equals 1 FEC + 50 kyat
using A1: 1 FEC + 50 kyat = 1 US$ + 50 kyat
1 US$ = 1 US$ + 50 kyat1)
1) Please note this does not mean that the kyat is an absolutely worthless currency!
Yangon undoubtedly offers the best exchange rates in all of Myanmar. At Bogyoke Aung San market, for example, one could, considering the above equation, exchange 100 US$ into 106 000 kyat, then find another moneychanger and buy 100 FECs for 101 000 kyat and make a profit of 5000 kyat - more than a week's worth of breakfast and dinner at cheap restaurants. An added bonus is not having to carry around bagfulls of kyat. A month's supply for two people can quickly add up to a half meter high stack pile of kyat bills if one is so unlucky to get 100 or 200 kyat bills instead of 1000 kyat bills. Of course, this is all too good to be true. First, one person will have a hard time spending more than 150 FECs in the usual 28 days of a tourist visa because it is simply cheaper to use kyat for everyday things other than hotels and entrance fees. Second, most hotels which accepted kyat charged only 1000 kyat for one US$, making the kyat price even cheaper than the FEC price. Third and last, FECs may be difficult to find in large quantities on the black market because there is a high demand for them in the Burmese population. The Myanmar government accepts only FECs, neither kyat nor US$, for bill payment of IDD phone lines, showing that the government is indirectly but effectively regulating the flow of FECs in the country. For transactions in US$, the regime goes a step further by requiring businesses to obtain a US$ licence.
For additional confusion, the kyat has also a few surprises in store for the unaware. Kyat bank notes come in the usual denominations of 1, 5, 10, 20, 50, 100, 200, 500, and 1000, the unusual denominations of 15 and 25, and the exotic denominations of 35, 45, 75, and 90! A while back, the 25, 35, and 75 kyat bills were taken out of circulation. Many of these bills, however, can still be found at souvenir shops where they are oddly worth more now than they were ever before. Anywhere else in the country, these bills are worth zero, although crook money changers or businessmen occasionally try to give them as change. The 45 and 90 kyat bank notes are still valid but are hardly seen in everyday life. This is no surprise really, since they are easily found at tourist markets. Souvenir vendors of any kind seem to hoard these bills because they sell for the highest prices. Finally, there are bills which say "Union of Burma" and others which say "Central Bank of Myanmar". As a rule of thumb "Union of Burma" bank notes are not valid anymore, except of course for the 1 and 5 kyat bills which are still valid with either caption.