31 August 2022

On 5 August 2022, the Central Bank of Myanmar (“CBM”) issued Notification No. 36/2022 (“Notification 36”) relating to the application of its previously announced mandatory foreign currency conversion requirements as set out in Notification No. 12/2022 (“Notification 12”).

Notification 12, issued on 3 April 2022, provides that all foreign currency earned by Myanmar residents must be deposited in banks with licences to exchange foreign currency (known as authorised dealer (“AD”) banks) and converted into Myanmar Kyat within one working day of receipt.

Notification 36 revises this requirement for exporters, stipulating that they are required to convert 65% of their export earnings into Myanmar Kyat, rather than 100% as provided for in Notification 12. CBM issued Letter FE-1/PaKa/1956 on 16 August 2022 (“Letter”) providing further information on the requirements set out in Notification 36 including an instruction to AD banks that the purchase of the 65% required to be converted to Myanmar Kyat must be done within one business day.  

The Letter also provides that the remaining 35% of export earnings may be used by the exporter for itself, transferred to non-AD entities or sold to AD banks, noting that the requirement to obtain the approval of the Foreign Exchange Supervisory Committee for any cross-border transactions still applies.

The Letter stipulates that any unused portion of the remaining 35% of export earnings must be sold to AD banks for Myanmar Kyat at the 30-day mark from receipt of the earnings. 

The variation in Notification 36 follows on from the entire exemption from Notification 12 given to exporters and importers trading under the China-Myanmar and the Thai-Myanmar border trade programmes. Our article titled “Central Bank of Myanmar exempts exporters and importers under the Thai-Myanmar Border Trade and China-Myanmar Border Trade programs from foreign currency conversion requirements” discusses this exemption.

Change in foreign exchange rate

CBM announced on 5 August 2022 that its official reference exchange rate has been changed from US$1 to MMK1,850 to the new rate of US$1 to MMK2,100. Authorised dealer banks were to begin using the updated rates on 5 August 2022, in accordance with Myanmar’s requirement to convert foreign currency transfers and balances to local currency using the official CBM rates.  

Reference materials

To read our articles on the foreign currency developments in Myanmar that were issued soon after each was announced, please click on the titles below: