On August 7, the Central Bank of Myanmar (CBM) issued notification 37/2024 with measures aimed at boosting the foreign exchange supplies in the market and mitigating foreign exchange losses for exporters. Starting from August 8, 2024, there is a new requirement for exporters to convert 25% of their foreign currency revenues into Myanmar Kyat at the reference rate, which is about MMK2,100 per USD.
Back in December 2023, the CBM introduced a policy compelling exporters to exchange 35% of their forex earnings into the local currency at the CBM's reference rate. This represented a reduction from the higher surrender mandates of 65% in August 2022 and 50% in July 2023.
The recent regulation permits exporters to trade the remaining portion of their foreign exchange proceeds on the officially-sanctioned forex market at the CBM platform rate, hovering near MMK3,380 per USD—although actual rates might be higher.
This decision will likely be favorable for those who can now swap a greater share of their foreign earnings at more advantageous rates. It aims to augment the availability of foreign exchange liquidity in the market, helping importers who are struggling to obtain foreign currency required to settle their import bills. Its effectiveness in substantially addressing the ongoing foreign exchange scarcity within the country remains to be seen.
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