Knowledge Highlights 5 April 2022
On 3 April 2022, the Central Bank of Myanmar (“CBM”) issued a directive and a notification relating to the conversion of foreign currency income into Myanmar Kyats. Both Directive No. 4/2022 and Notification No. 12/2022 came into immediate effect upon their issuance.
Banks to convert foreign currency received
Directive No. 4/2022 instructs banks that hold an authorised dealer licence (“AD banks”) to convert income, whether from trade or non-trade sources, received from overseas into Myanmar Kyats within one working day of the receipt of those funds.
The Directive specifies that this conversion should be done at the rate of MMK1,850 to US$1 with the conversion of other foreign currencies to be made at rates prescribed by the CBM in the Directive.
From 4 April 2022, foreign currency can only be transferred out of Myanmar with the approval of the Foreign Exchange Management Department. Further instructions on this matter, including any exceptions to this general restriction, will be published by the CBM.
The Directive also instructs AD banks to convert foreign currency in accounts opened prior to 3 April 2022 into Myanmar Kyats, noting that the CBM will issue further instructions in this regard.
Foreign currency earnings to be deposited and converted
Notification No. 12/2022 provides that foreign currency earned by Myanmar residents must be deposited in AD banks and converted into Myanmar Kyats within one working day of receipt. Exceptions may be prescribed by the CBM. Foreign currency deposited into foreign currency accounts before the issuance of this Notification must also be converted into Myanmar Kyats.
Notification No. 12/2022 stipulates that those found in breach of its provisions will be liable to the penalties set out under the Foreign Exchange Management Law which are imprisonment of not more than one year, monetary fine, or both.