The junta-controlled Central Bank of Myanmar (CBM) has named those exempt from its controversial regulation that foreign exchange earned by citizens must be converted into kyats at the official rate within one working day.

It said foreign direct investments approved by the Myanmar Investment Commission, investments operating in special economic zones, foreign diplomats in Myanmar, their family members, foreign diplomatic and United Nations staff and citizens holding UN laissez-passer are exempt.

Diplomat-level foreign staff from the International Committee of the Red Cross, International Labor Organization and other international non-governmental organizations and development agencies, such as the Japan International Cooperation Agency, and international airlines are also exempted.

Licensed banks must ensure exemptions are granted correctly, said the central bank, which requires banks to report every exemption request.

On April 3, the CBM said foreign currencies must be deposited in accounts at licensed banks and exchanged at the rate of 1,850 kyats per dollar within 24 hours. The street exchange rate is more than 2,000.

It said the directive applied to foreign currency that entered the country before April 3 and failure to comply would lead to prosecution under the Foreign Exchange Management Law.

The Singaporean, Japanese and European Union missions asked the regime to exempt their citizens’ companies and NGOs, saying they would impede their ability to trade.

“Business owned by citizens and ventures jointly owned with and foreigners are not exempt. Domestic businesses will suffer the most,” said an economist, who asked for anonymity.

“And the regime still cannot handle the problem of how it will sell US dollars to businesses. This notice only responds to international complaints but further worsens the situation for domestic businesses,” he added.

Exporters and foreign currency account holders lost nearly 10 percent of their earnings because of the gap between the official and street exchange rates, according to traders.

Source:
courtesy of THE IRRAWADDY

by THE IRRAWADDY

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