Under the new system the service fees do not change, but customers must pay them in foreign currency, said an official from Myanma Investment and Commercial Bank, one of the three financial institutions in the country that handle foreign currency.

The other two are Myanma Foreign Trade Bank and Myanma Economic Bank.

These three banks and the Central Bank of Myanmar - all of which are owned by the government - last March joined the Belgium-based SWIFT banking transaction network.

SWIFT is a bank-owned cooperative with 7500 members in 200 countries that facilitates the transfer of money between financial institutions

"We have to switch from kyats to dollars or euros as the banks that have connected to the SWIFT network have to pay service fees in foreign currency," said a bank official. "You have to pay for every transaction so customers will not use the banks as often as before, and the trading cost will be higher," said U Maung Shwe, a leading businessman in Yangon Rangoon . "Previously, customers were charged in kyats calculated at a rate of about 6 kyats to one US dollar," he said.

"At the open market rate, the new system will be about 140 times the previous value," said another trader. "The new system is a small change but we cannot predict how it will affect trade and the banking industry. It will depend on other matters," said the trader.

"But we know trading costs will be higher, and that it is more complicated I for us to use the euro for transactions," said the trader.

Many analysts said that Myanmar Burma has been able to use the SWIFT network to minimize the effect of US sanctions, which among other things seek to bar financial transactions to and from Myanmar using US dollars.

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