Myanmar: Officials cancel exemptions for some entities from foreign currency exchange rule, order suspension of foreign loan repayment as of July 15

Event

The Myanmar military government has tightened some foreign currency policies as of July 15. Authorities have canceled exemptions for companies with at least 10 percent foreign ownership from a policy that requires them and residents to exchange foreign currency into local currency within one working day at licensed banks at the official rate. Exceptions from the regulation remain in effect for some individuals and entities, such as companies operating in Special Economic Zones or involved in projects using foreign direct investment approved by Myanmar Investment Commission (MIC). Additionally, officials have ordered companies and individuals to suspend or reschedule foreign loan repayments.

The policies will probably prompt business disruptions nationwide. Long lines may form at the licensed banks as individuals and companies deposit foreign currency earnings. Rallies against the rules are possible. Increased security and localized transport and business disruptions are likely near any protests. Clashes are possible if security personnel attempt to disperse any gatherings forcibly.

Context

The policies are related to the foreign currency reserves shortage in Myanmar. Reports have attributed the shortage to international sanctions against the junta following the February 2021 military coup.

Advice

Plan for business disruptions. Avoid any demonstrations as a precaution. Heed all official instructions.