The new restrictions on US dollars introduced last week by the Central Bank of Myanmar (CBM) have come as a crippling blow to businesses already struggling in an economic recession resulting from post-coup political turmoil and the COVID-19 pandemic.
The new restrictions saw the bank revoking the exemption from mandatory currency conversion given to companies with a minimum 10 per cent foreign ownership.
In April, the CBM ordered financial institutions to convert foreign currency earned by its customers into kyat within one business day at an official exchange rate of 1,850 kyats to the US dollar, as the military regime was desperate for US dollars. In June, following requests and criticisms, the bank exempted companies that are 10 per cent or more owned by overseas entities from the mandatory currency conversion.
At the same time, the bank has also ordered companies and individual borrowers to suspend repayments of foreign loans, both on the interest and the principal loan.
The new restrictions saw the bank revoking the exemption from mandatory currency conversion given to companies with a minimum 10 per cent foreign ownership.
In April, the CBM ordered financial institutions to convert foreign currency earned by its customers into kyat within one business day at an official exchange rate of 1,850 kyats to the US dollar, as the military regime was desperate for US dollars. In June, following requests and criticisms, the bank exempted companies that are 10 per cent or more owned by overseas entities from the mandatory currency conversion.
At the same time, the bank has also ordered companies and individual borrowers to suspend repayments of foreign loans, both on the interest and the principal loan.
