The Central Bank of Myanmar (CBM) has revoked foreign exchange licences held by hotels, airlines and thousands of other businesses, in a bid to counter dollarisation.
Foreign exchange licences held by businesses including airlines, hotels and shops have been recalled by the Central Bank of Myanmar. Photo: Aung Htay Hlaing / The Myanmar TimesForeign exchange licences held by businesses including airlines, hotels and shops have been recalled by the Central Bank of Myanmar. Photo: Aung Htay Hlaing / The Myanmar Times
The new policy is effective from today. Companies must return their licences to the Foreign Exchange Management Department (FEMD) by November 30, a Central Bank official told The Myanmar Times.
Banks and money changers can still exchange foreign currencies, but others such as communication services, airlines, tour companies, hotels, hospitals, freight forwarders, supermarkets, duty-free and souvenir shops must give up their licences, said the official.
The military-owned Union of Myanmar Economic Holdings will also have to return its licence, he said.
An announcement published on the CBM website on October 16 confirmed the decision.
The Central Bank official said he hopes the new policy will encourage more card payments, particularly in the tourism industry. Point-of-sale systems are gaining traction but are still not widely used.
Non-banking businesses have been allowed to deal in foreign exchange since the Foreign Exchange Management Law was enacted in 2012.
However, now that people have sufficient access to US dollars and other foreign currencies through bank and non-bank money changers, this is no longer necessary, said the Central Bank official.
“It is illegal to trade foreign currency without a licence, but we also allow individuals to carry up to US$10,000. This has led to some confusion – our new policy will make things clearer,” he said.
The Foreign Exchange Management Law was updated in May 2015. According to Section 38, it is illegal to trade in foreign currency without a licence. Lawbreakers face up to three years in prison or a fine, or both.
Foreign exchange licence holders including banks and money changers can hold no more than $50,000 in cash at any time, he said, adding that every five years they must renew their licences at a cost of K100,000.
U Win Thaw, deputy director general at the FEMD, said he will try to ensure banks are able to supply sufficient foreign exchange.
“This policy is aimed at lowering dollar demand and protecting commodity prices,” he said.
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Source: Myanmar Times