Domestic Payments to Be Made in Myanmar KyatJune 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.