29 November 2018
On 8 November 2018, the Central Bank of Myanmar (“CBM”) issued Directive 6/2018 (“Directive”) which allows foreign bank branches to provide wholesale banking services for local companies, in cooperation with foreign companies and local or foreign financial institutions. The CBM states in the Directive that it has made this change to existing rules in order to increase access to finance for local businesses.
Following the issuance of the Directive, the CBM went on to clarify its position by stating in the local press that foreign banks will be able to provide financing and other related banking services in foreign currency as well as in Myanmar kyats. The Deputy Governor of the CBM also noted that the CBM expects foreign banks will mainly provide foreign currency to local businesses, particularly to finance trade, which would in turn support the country’s trade sector. The interest rate for loans in foreign currencies will not be fixed and can be transacted based on the market rate.