CBM eases currency conversion rules for exporters

The Central Bank of Myanmar relaxed the compulsory foreign currency conversion rule to 50 per cent from 65 per cent, in the exercise of the power conferred by Section 49 (B) of the Foreign Exchange Management Law, according to its Notification No 15/2023 dated 13 July.
According to the CBM’s Notification No 36/2022 dated 5 August 2022, the exporters had to convert 65 per cent of the hard currency they earned into local currency according to the Central Bank of Myanmar’s reference exchange rate. The CBM eased the foreign currency rules to 50 per cent for exporters, according to the notification No 12/2022.
This came into effect on 13 July. If the exporters fail to comply with this notification, they will face legal actions under the Foreign Exchange Management Law, the CBM stated.
Although the CBM set the reference exchange rate at K2,100, US dollars were exchanged at K3,100 in the shady dealings.
The CBM notified that the exchange rate transacted on online trading platforms is the actual currency value and the US dollar was exchanged at over K2,900 on 22 June when the online trading platform started.
In 2013, the CBM implemented a forex market for interbank transactions among authorized dealers and bank-customer transactions for foreign exchange market development.
International forex trading platform (Refinitiv) helped the authorized dealers deliver a complete function for inter-bank transactions. The CBM has been managing online trading for bank-customer transactions.
Starting on 22 June, the CBM led the online trading platform for bank-customer transactions and transactions between clients. The total turnover for the trading of the six authorized banks was US$6.89 million with an exchange rate of K2,920-2,922.
Furthermore, the CBM also provided USD SWAP Financing and sold 1.2 million dollars.
The exchange rate transacted on online trading platforms determines the actual value and the rate in shady dealings and posted on social media platforms are just grey market rates, the CBM warned.
The CBM will provide SWAP Financing for the essential goods in need and intervene in the forex market, according to the notification issued on 21 June 2023. — NN/EM