fbpx

Type to search

Myanmar-China Traders Battered by Forex Rates, New Rules

The traders have been critical of the gap between the market rate and the regulated exchange rate of the local kyat and US dollar, The Global New Light of Myanmar said.


Myanmar's kyat banknotes are seen in a donation box of Sule Pagoda in Yangon. File photo: Reuters

 

Cross-border traders between Myanmar and China are being battered by Yangon’s currency policy and the need for export licences, state media said on Sunday.

The traders have been critical of the gap between the market rate and the regulated exchange rate of the local kyat and US dollar, The Global New Light of Myanmar newspaper reported.

The official rate is 1,850 kyats to the greenback, but street rates have exceeded 3,000 kyats per dollar in recent weeks.

Last week, Myanmar’s central bank ordered companies with up to 35% foreign ownership to convert their foreign exchange into the local currency, extending a rule aimed at relieving pressure on the kyat to include more businesses.

In April, the central bank exempted foreign entities from the new policy after the rule had triggered an outcry among business groups and residents.

In addition, since May traders have needed to seek an export licence even for basic crops such as lentils and soybeans. The rule was enacted to control domestic prices.

Under the latest rules, a list of Myanmar companies with up to 35% foreign ownership had been sent to foreign exchange dealers, who are required to convert currencies and submit the amount by 6 p.m. on Monday, the paper reported.

Unspecified action would be taken against anyone not following the rules, the report said.

Myanmar has been in turmoil since the military staged a coup last year, arresting civilian leaders including Aung San Suu Kyi. The Southeast Asian country’s economy has also tanked since the coup, which halted a decade of political and economic reforms.

 

  • Reuters, with additional editing by George Russell

 

READ MORE:

Myanmar Sets Up China-Made CCTVs in More Cities

Crime Gangs Control Some Myanmar, Laos Economic Zones: UN

Myanmar Modifies Forex Order to Exempt Foreign Groups

George Russell

George Russell is a freelance writer and editor based in Hong Kong who has lived in Asia since 1996. His work has been published in the Financial Times, The Wall Street Journal, Bloomberg, New York Post, Variety, Forbes and the South China Morning Post.

logo

AF China Bond