In a significant development on December 5, 2023, the Central Bank of Myanmar (CBM) issued Letter No. FE-1/2937 granting authorized dealer licensed banks (ADLBs) the authority to freely transact in foreign currency trades, buying and selling at the market exchange rate for Myanmar kyat (MMK) as proposed by buyers and sellers through online trading platforms. Offshore remittances, however, must comply with the remittance criteria set by the Foreign Exchange Supervisory Committee.
The online trading platform Refinitiv, initiated in June 2022 under the CBM's guidance, facilitates the buying and selling of foreign currency between ADLBs and between banks and customers. The initiative was implemented in accordance with CBM Letter No. FE-1/789, dated June 21, 2023. The platform's inception saw the exchange rate set at over MMK 2,900 per USD 1.
Then, in August 2023, the CBM ordered banks and traders to limit foreign exchange transactions to an approved online trading platform, again with the exchange rate fixed at MMK 2,900 per USD 1. Transactions outside of online trading platforms continue to be governed by the exchange rate set by the CBM of 2,100 MMK per USD 1.
Conversion Rules for Exporters
On December 6, 2023, the CBM issued Notification No. 26/2023 lowering the percentage of Myanmar companies' export earnings in foreign currency subject to mandatory conversion into MMK from 50% to 35% at the current official exchange rate set by the CBM at USD 1 to MMK 2,100. This mandatory conversion must follow the requirements for mandatory conversion of foreign currency, which remain in effect.
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