Myanmar Digital Currency Compliance: Central Bank Issues Further Directives

Yangon, Myanmar - April 8, 2022

The Central Bank of Myanmar (CBM) has issued two new directives to further clarify its previous instructions on digital currency compliance. These latest directives provide additional guidance on the conversion of foreign currency income into Myanmar Kyats and outline the obligations of Authorized Dealer banks in completing this process.

Conversion of Foreign Currency Income

According to the new directives, AD banks are required to convert income from trade or non-trade sources received from overseas into Myanmar Kyats within one working day of receipt. This includes:

Export Proceeds: income earned from exports
Other Proceeds: income from services, inflows of funds for investment, loan receipts for investment, and unilateral transfers for gifts, donations, maintenance costs, inheritances, receipts from transfer of real estate, aid, or allowance

Foreign currency earned by Myanmar residents must be deposited in AD banks and converted into Myanmar Kyats within one working day of receipt. This applies to:

Incoming International Transfers: foreign currency received from abroad
Outgoing Transfers: foreign currency transferred out of the country
Foreign Currency Accounts: foreign currency held in foreign currency accounts with Myanmar banks

Conversion Process

AD banks are instructed to transfer and deposit the foreign currency received into the relevant company or individual’s account on the date of receipt, and then convert the foreign currency at CBM’s specified exchange rate and deposit the converted sum into the relevant company or individual’s Myanmar Kyat account.

FESC Permission Requirements

The directives also outline the requirements for AD banks to seek permission from the Foreign Exchange Supervisory Committee (FESC) before transferring foreign currency out of the country. This includes:

Payment for Imports: payment for imports
Payment for Services and Other Costs: payment for services and other costs
Payment for Dividends and Return of Capital: payment for dividends and return of capital
Transfer for Offshore Investments: transfer for offshore investments
Repayment for Offshore Loan Principals and Interests: repayment for offshore loan principals and interests
Transfer for Expenses: transfer for expenses as provided in paragraph 27 of the Foreign Exchange Management Regulation

The FESC permission will enable AD banks to sell the foreign currency to the permitted person at the exchange rate specified by CBM with service fees of MMK 1 per US$1 collected. Exceptions may be prescribed by CBM.

Strengthening Digital Currency Compliance

These directives aim to strengthen Myanmar’s digital currency compliance and ensure that all transactions are conducted in a transparent and regulated manner.