Central Bank of Myanmar restricts USD withdrawals
The Central Bank of Myanmar (CBM) has issued restrictions to banks concerning cash withdrawals from foreign cur-rency accounts, mostly held in USD. The new restrictions prevent foreign currency account holders from withdrawing more than twice per week and sets the limit per withdrawal to USD 5,000. While private and corporate accounts are affected by the new regulations, there are exceptions to some bodies such as embassies and UN organizations. The limitations don’t apply to electronic transactions between foreign currency accounts of different account holders. Further, CBM has urged the government, on all levels, to accept payments in Myanmar Kyat and avoid foreign curren-cy payments. The Central Bank’s intention by imposing the restrictions, is to prevent a dollarization of the Myanmar economy and to reduce currency speculations, both of which make the exchange rate fluctuation worse, according to U Mya Than, chair of the Yangon Foreign Exchange Committee. The move comes at a time, where the Myanmar Kyat has been continuously depreciating against the USD. The informal market has started to offer significantly higher ex-change rates for the USD against the Myanmar Kyat than the banks, which follow the instructions of CBM. Experts have warned that too much restrictions by the Central Bank might drive actors out of the banking system into the informal market.
Companies and Investments