YANGON (Xinhua): The Central Bank of Myanmar (CBM) on Wednesday (May 25) banned foreign currency for local payments to stabilize the foreign exchange rate in the country.
The bank asked government agencies to pay with only Myanmar kyat, saying the use of foreign currencies for domestic payments could lead to higher demand for dollars and cause exchange rate instability.
The move came after the CBM found out that some government agencies and organizations were using foreign currencies for local payments, the central bank said in a statement on Wednesday.
"Some government agencies were using and accepting foreign currencies in some of their activities including renting lands, capital investments for insurance business and income from joint ventures," Win Thaw, deputy governor of the central bank, said in the statement.
He added that the CBM has found out the US dollar was also being used in some hotels, restaurants, international schools, souvenir shops and renting of properties to foreigners in the country.
It already sent the notification to all ministries, region and state governments and municipal committees of Nay Pyi Taw, Yangon and Mandalay cities to use only kyat for the purchase and sales of goods and services and payments in the country, the central bank said.
The CBM last month ordered all local holders of foreign currencies, excluding some foreign organisations and traders that were later exempted from it, to compulsorily convert them into kyat within one working day after receiving the foreign currencies.