Junta imposes new restrictions on US dollars

By Admin 21 Aug 2023

DMG Newsroom
21 August 2023, Sittwe

Starved of hard currency, Myanmar’s junta-controlled Central Bank of Myanmar (CBM) issued new restrictions on US dollars on Monday, telling the public to convert US dollars to kyats within six months of acquiring greenbacks.

The CBM has also threatened legal action against noncompliance in its latest mandatory conversion edict.

According to the new order, anyone living in Myanmar can only legally possess a maximum US$10,000 in cash for a maximum period of six months. They are required to convert their greenbacks at licensed money changers at the market rate after the six months has lapsed.

“The regulation does not affect us,” said a woman who earns her monthly salary in US dollars. “Though we are paid our salaries in US dollars, the employer transfers the money to a Thai bank. We don’t hold dollars in hand.”

Many international organisations and UN agencies transfer the salaries for their local employees in Myanmar through banks in Thailand.

If salaries are transferred to a local bank, employees suffer as they are also be required to convert dollars to kyat at the fixed exchange rate of about 2,100 kyats set by the junta-controlled CBM. The market exchange rate is currently approaching 4,000 kyats to the dollar.

The kyat has continued to slump against the US dollar as the United States recently levelled sanctions against two key state-owned banks that deal with international transactions, and warned foreign banks that deal with the two sanctioned banks. The issuing of a new, high-denomination 20,000 kyats note has also been a factor, according to economists.

Meanwhile, exporters are also required to convert 50 percent of their export earnings to kyat at the official exchange rate, and importers say they are short of dollars to make foreign purchases.