Knowledge Highlights 6 November 2024
Central Bank of Myanmar stipulates only Myanmar Kyat to be used in domestic payments
In a letter dated 25 May 2022 issued to Union Ministers, Regional and State Governments and City Development Committees (“Letter”), the Central Bank of Myanmar (“CBM”) notes that the use of foreign currency (primarily US Dollars) instead of Myanmar Kyat in both the public sector (by government enterprises and organisations under the respective Union Ministries (e.g. via rentals from land leases, the contribution of capital for insurance businesses and income generated from joint ventures)) and the private sector (e.g. by hotels, restaurants, international schools, souvenir shops, and landlords) may result in the wider use of foreign currency in the country, higher demand for foreign currency and the instability of the foreign exchange rate.
Via the Letter, CBM has mandated that all Union Ministers, Regional and State Governments and City Development Committees are to use only Myanmar Kyat, the national currency, for domestic transactions and payments by these bodies, their subsidiary organisations, departments and enterprises. CBM also requires all relevant Union Ministers, Regional and State Governments and City Development Committees to instruct the private enterprises under their administration and purview to transact only in Myanmar Kyat and to comply with CBM Notification No. 12/2022. They are also required to report to CBM once such instruction has been given.
With the exception of exempted transactions as provided for under CBM Notification No. 12/2022, Myanmar residents’ foreign exchange earnings must be deposited with foreign exchange authorised dealer licensed banks to be converted into Myanmar Kyat within one business day upon receipt. The exemptions set out in Notification No. 12/2022 are set out in our article “Central Bank of Myanmar announces exemptions to foreign currency conversion mandate”.
Reference materials
We have been following recent restrictions placed on the handling of foreign currency in Myanmar. Articles on these developments, among others, are featured on our website www.allenandgledhill.com/mm and available at the links below:
