Banking Regulation Updates in Myanmar: CBM Revises Foreign Currency Conversion Requirements for Exporters
The Central Bank of Myanmar (CBM) has issued Notification No. 36/2022 to revise its mandatory foreign currency conversion requirements for exporters, aimed at streamlining foreign exchange regulations.
Previous Requirement
As previously reported, under Notification No. 12/2022, all foreign currency earned by Myanmar residents was required to be deposited in banks with licenses to exchange foreign currency and converted into Myanmar Kyat within one working day of receipt.
Revised Requirements
The revised notification now stipulates that exporters must convert 65% of their export earnings into Myanmar Kyat, rather than the full 100%. This change is expected to provide more flexibility for exporters in managing their foreign currency earnings.
Guidance and Instructions
On August 16, the CBM issued a letter providing further guidance on the requirements outlined in Notification No. 36, including an instruction to authorized dealer banks that the purchase of the required 65% must be done within one business day.
- Exporters are allowed to use the remaining 35% for their own purposes or transfer it to non-authorized entities or sell it to authorized banks.
- Any unused portion of the remaining 35% must be sold to authorized banks for Myanmar Kyat by the 30-day mark from receipt of the earnings.
Context and Background
These changes come on the heels of the CBM’s exemption earlier this year for exporters and importers trading under the China-Myanmar and Thai-Myanmar border trade programs.
Official Reference Exchange Rate Change
In related news, the CBM announced a change to its official reference exchange rate, adjusting the rate from US$1 to MMK1,850 to US$1 to MMK2,100. Authorized dealer banks were instructed to begin using the updated rates on August 5.
Ongoing Efforts by the CBM
These developments are part of ongoing efforts by the CBM to regulate foreign exchange transactions in Myanmar. For more information on these and other foreign currency updates, please visit our website for articles published earlier this year.