Two ministers of the army-installed government of Myanmar spoke about the Central Bank of Myanmar’s new rules requiring the conversion of foreign exchange into Myanmar Kyat, which is the Southeast Asian country’s local currency.
They are Aung Naing Oo, who is the army-installed government’s minister for Investment and Foreign Economic Relations, and Myanmar’s Minister of Information, Maung Maung Ohn.
We want to assist our followers who may be holding units of the Myanmar Kyat in managing their money. We believe sharing this latest foreign exchange-related report with them will help.
According to the update posted online by US-based news source CTPost, Aung Naing Oo and Maung Maung Ohn spoke on behalf of the army-installed government that seeks to reassure foreign investors.
This week, these two government officials said that the current administration seeks to counter worries over currency controls, sanctions, and energy shortages, adding to the military-led government’s challenges in managing the economy.
Aung Naing Oo and Maung Maung Ohn confirmed in an online briefing that approved foreign investors, United Nations agencies, foreign embassies, and non-government organizations are exempt from the rules that the Central Bank of Myanmar recently announced.
The Southeast Asian nation’s central bank proclaimed that foreign currency bank holdings must be converted to Myanmar kyats within one day of their receipt. Aung Naing Oo cited that this new policy of the Central Bank of Myanmar intends to stabilize the exchange rate after the Myanmar kyat plummeted to over 2,000 Myanmar kyats to the US dollar.
He pointed out that the military administration was drawing up standard operating procedures for banking transactions. Nevertheless, Aung Naing Oo said that foreign firms and others qualifying would be provided with an automatic exemption.
These entities consist of businesses operating in Thilawa, a location south of the biggest city, Yangon, and is Myanmar’s only special economic zone. Aung Naing Oo relayed that the country is in a transitional period, and the people are improving themselves.
He added that there would be no more additional burden on foreign firms due to the new central bank regulations. At the time of writing, US$1 is equivalent to 1,861.78 Myanmar kyats, based on the foreign exchange data posted on Xe.com.
Foreign governments and business groups had vehemently protested the Central Bank of Myanmar’s new rules. Among these entities are the American Chamber of Commerce and those of the United Kingdom, France, and Australia, and similar groups.
They argued earlier that the requirement of swapping their currencies for Myanmar kyats would result in trade tensions. Additionally, these foreign governments and business organizations said the Central Bank of Myanmar’s recently announced regulations would discourage foreign business activity and investment.
They pointed out in a joint statement that the implementation of the Central Bank of Myanmar’s measures and the associated dearth of clear exemptions for foreign investments create significant and, for some, insurmountable problems for all enterprises operating in the Southeast Asian country.
We gathered that Myanmar’s economy has slumped amid the coronavirus or COVID-19 pandemic and the widespread public resistance to the military takeover. This reality has kept away foreign tourists whose spending accounts for a massive share of foreign exchange earnings.
The latter are required by Myanmar’s government to repay foreign debts and pay for imports of food, fuel, and other necessities. We believe it would be best if both parties, which are the officials of Myanmar’s army-installed government and the foreign governments and businesses, reach common ground.
We recommend they discuss matters involving the Myanmar kyat and the overall Myanmar economy. In this way, a win-win scenario will be achieved, with Myanmar and its citizens benefiting from the advantages of foreign investments in the economically struggling country.