Myanmar: Authorities prohibit state agencies from using foreign currency for domestic transactions as of May 27

Event

The central bank of Myanmar has banned state agencies from using foreign currency in domestic transactions as of May 27. It is unclear if the authorities provide any exemptions and if officials will expand the policy to private entities.

The measure will probably prompt some business disruptions, especially for entities that conduct transactions with state agencies. Locals may stage rallies against the policy. 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 central bank attributed the order to an attempt to stabilize the foreign exchange rate in Myanmar. Authorities had previously implemented other policies to ease the alleged foreign currency shortage in the country; reports have attributed the shortage to international sanctions against the Myanmar military (Tatmadaw) authorities following the 2021 coup. The measures include a policy that requires most companies and residents to exchange foreign currency into local currency within one working day at licensed banks at the official rate.

Advice

Plan for business disruptions. Avoid any demonstrations due to possible clashes. Heed all official instructions.