Burma, officially known as Myanmar, has said it will start a managed float of its currency from 1 April to attract foreign investors.
The Central Bank of Myanmar (CBM) said the currency, the kyat, will "from now on be determined by supply and demand".
The current official exchange rate pegs one US dollar at 6.41 kyat.
Burma has been implementing reforms since a civilian government, albeit one led by former generals, took over from the military last year.
Analysts said the official exchange rate could be fixed around 800 kyat to one US dollar, the current unofficial rate.
"A key part of this programme is to unify the various exchange rates, and gradually eliminate restrictions on current international payments and transfers abroad," the CBM in a statement to state media.
Under a managed float system a currency's exchange rate is determined by the market.
At the same time the central bank publishes a daily reference exchange rate to influence the market.
Key parliamentary by-elections are also being held on 1 April, in which dissident Aung San Suu Kyi would be contesting one of the seats.
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