Myanmar: Officials order banks to convert the foreign currency account balance of companies with up to 35 percent foreign ownership as of July 18

Event

The Myanmar military government has ordered banks to convert the foreign currency account balance of companies with up to 35 percent foreign ownership to the local currency as of July 18. Reports indicate that officials have provided the foreign exchange vendors with the list of companies with up to 35 percent foreign ownership and required the vendors to give information on the affected companies' foreign currency account balance. Violators of the measures will reportedly face sanctions; the enforcement of the rule varies across the country.

The policy will probably prompt business disruptions nationwide. Rallies against the regulation 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 policy is related to the foreign currency reserves shortage in Myanmar due to international sanctions against the junta following the February 2021 military coup. The regime's past related measures include requiring companies and individuals to exchange foreign currency earnings into the local currency within one working day at licensed banks at the official rate with limited exceptions, as well as ordering companies and individuals to suspend or reschedule foreign loan repayments.

Advice

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