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July 18, 2022

Myanmar Orders Conversion of Foreign Currency Balances of Companies with up to 35% Foreign Ownership

On July 15, 2022, the Central Bank of Myanmar (CBM) issued Letter No. FE-1/754 instructing banks with authorized dealer (AD) status to inform the CBM of the balances in foreign-currency accounts belonging to Myanmar companies with up to 35% foreign ownership. This was to be done by 6 p.m. on the same day.

In addition, AD banks were ordered to purchase the balances of the relevant foreign-currency accounts and exchange the amounts with Myanmar kyat (MMK). These amounts are to be entered into the bank-customer (bid) and non-trade inward (real time-R) lists by 6 p.m. on July 18, 2022.

The letter also warned that the failure to follow this instruction would be subject to various sanctions, including warnings, restriction of foreign exchange management functions, fines, temporary or permanent suspension of banking authorizations, and cancellation of business licenses.

Letter No. FE-1/754 followed a decision made by the Foreign Exchange Supervisory Committee in meeting No. 32/2002 requiring foreign-currency balances held in accounts of Myanmar companies with up to 35% foreign ownership to be converted into MMK. A list of these companies, provided by the Foreign Exchange Supervisory Committee, was included with the letter.

For more details on these foreign exchange developments, or on any aspect of financial regulations in Myanmar, please contact Tilleke & Gibbins at [email protected].

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