Myanmar exempts most foreigners from currency conversion rule

YANGON (Bloomberg): Myanmar’s military government exempted most overseas nationals and entities from compulsorily converting foreign currencies into kyat after international push back over the move.

Businesses in the nation’s three special economic zones are exempted from the April 4 order on currency conversion, according to a statement from the Central Bank of Myanmar.

The waiver will also apply for diplomats and their families, foreigners working for embassies, the United Nations and other development agencies and international civil society groups.

Flag carrier Myanmar National Airlines and local airlines that operate on overseas routes also don’t require to convert foreign earnings into kyat, which has tumbled 4% this year against the dollar after losing its value by more than a third in 2021.

Thursday’s order marks a climbdown by Myanmar’s authorities after some foreign missions protested the move, aimed at minimising reliance on US dollars.

The forex conversion order followed the pull out of investments by global companies after international sanctions over human right violations since the military toppled the Aung San Suu Kyi-led civilian government in a 2021 coup.

A deputy governor at the Central Bank of Myanmar was also shot and wounded by two unidentified gunmen, days after the authority issued the kyat conversion order in what is believed to be the most high profile attack on a senior official since the coup.

Since the military takeover in February 2021, junta troops have killed nearly 1,800 civilians, arrested more than 13,300 others and sealed off about 550 properties by pro-democracy activists, according to the Assistance Association for Political Prisoners.

Myanmar has since allowed direct conversion of yuan and baht for the local currency along the borders with China and Thailand. The country is also in talks with India for direct kyat-rupee payments for trade, Major General Zaw Min Tun, lead spokesman for the State Administration Council, said.