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Domestic Payments to Be Made in Myanmar Kyat

Domestic Payments to Be Made in Myanmar Kyat

June 7, 2022

The Central Bank of Myanmar (“CBM”) issued Notification No. 195/2022 to Union Ministers, Regional or State Governments, City Development Committees of Nay Pyi Taw, Yangon and Mandalay on 25 May 2022 directing domestic payments to be made in Myanmar Kyat (“MMK”).  

This is a follow-up to Notification no. 12/2022 issued on 3 April 2022 which states that except for the exemptions issued subsequently, income received in foreign currencies by Myanmar residents from foreign countries must be converted to MMK within one business day at authorized dealer banks when the income has been repatriated into Myanmar.

Moreover, this is to control the increase in demand for foreign currency, widespread use of foreign currency in the country, and instability of the exchange rate. Notification No.195/2020 is addressed to relevant Ministries and Regional or State Governments, requesting them to direct the departments and organizations under their management and related government and private enterprises to use MMK only in making payments for sales or purchase of goods and services, and to use MMK currency to describe the contract price.     

CBM’s assessment on current domestic payments    

This notification is directed at hotels, restaurants, and schools opened in the country with foreign investment, as well as local accommodation, souvenir shops, etc. catering to foreigners which are still transacting in foreign currency. In addition, enterprises and organizations under respective Union Ministries are accepting the proceeds of business operations (e.g., proceeds from land leasing, capital contribution of insurance businesses, and proceeds from joint venture businesses) in foreign currency and it is directed to use MMK going forward.

AUTHOR

Honey is a director and is advising clients in a wide range of industries on tax compliance, accounting and payroll, financial and tax due diligence and tax structuring. She has recently conducted financial due diligence on state-owned banks in Myanmar for its restructuring. Honey qualified as a CPA with PwC in Sweden and holds a master’s degrees in accounting, finance and business development from Umea University in Sweden and a bachelor degree in Business Management from National Management College in Myanmar.


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