Myanmar’s central bank will no longer set exchange rates for foreign currencies and will allow banks and dealers to decide rates themselves, according to state media, in a rare easing of some of its tight forex controls.
With Myanmar’s economy in tatters after a 2021 coup and foreign reserves under pressure, authorities have imposed a slew of measures to suppress demand for foreign currencies, while cracking down on black market trading and revoking more than 140 money changer licenses this year.
A spokesperson for the military government said on Thursday (Dec 7) that the rules were relaxed to “increase exports and promote economic development”.
“In order to develop our country, manufacturing must be encouraged, the amount of exports must be increased. While we are implementing it, there will be a few impacts on imports. For example, it will have an impact on the fuel sector, but it is just temporary,” Zaw Min Tun said on Telegram.
In July this year, he had said Myanmar had “adequate foreign currency reserves”.
State media reported the changes in forex rules on Wednesday.
Under military rule, the central bank has moved away from a managed floating exchange rate system toward reliance on administrative controls, including requiring firms to surrender foreign exchange and report currency trades.
Some exporters have been required to convert dollar earnings into the kyat at an official rate set by the central bank, which in August ordered ministries and local governments not to use foreign currencies for domestic transactions, to ease pressure on the local unit.
Source: CNA
