Change of Official Exchange Rate
On 5 August 2022, CBM increased the official reference exchange rate of Myanmar Kyat ("MMK") to US Dollars, from the previous rate of MMK 1,850 per US$1 to MMK 2,100 per US$1.
Relaxation of Conversion Requirement for Export Earnings
On 5 August 2022, CBM issued Notification No. 36/2022 ("Notification 36") clarifying its foreign currency conversion requirement for exporters. Notification 36 specifies that only 65% of income received from exportation is required to be converted to MMK within one day.
On 16 August 2022, CBM further issued Letter No. FE-1/PaKa/1956 instructing authorised dealer banks ("AD Banks") to purchase 65% of the export balance to comply with the conversion requirement. The remaining 35% of the export balance is to be converted into MMK if exporters do not use it within 30 days. The 35% of the export balance may also be used by the exporter, transferred to non-AD entities or sold to AD Banks, for which the approval from the Foreign Exchange Supervisory Committee (FESC) must be sought. In fact, Letter No. FE-1/PaKa/2071 which was issued on 26 August 2022 requires the AD Banks to report how the 35% of export earnings are used.
In addition, Letter No. FE-1/PaKa/1957 issued on the same day provides instructions stating among others that entities exempted from Notification 12/2022 are able to freely utilise 100% of their foreign currency earnings. The Notification No. 12/2022 dated 3 April 2022 states foreign currency account holders can no longer hold their foreign currency for more than one day.
