Myanmar govt says foreign investors need not convert foreign exchange to local currency

Amid the ongoing crisis in Myanmar, the authorities on Thursday attempted to address concerns about penalties, energy shortages, as well as currency controls, all of which are hindering the military-led government's efforts to manage the economy. Myanmar has been reeling under crisis since the country's military, the Tatmadaw, ousted the Aung San Suu Kyi led civilian government in a coup in February, last year.   

During an online briefing, two ministers of Myanmar's army-installed government revealed that authorised foreign investors, embassies, United Nations agencies, as well as non-governmental organisations are excluded from the recently announced central bank regulations which require the conversion of foreign exchange into the local currency, The Associated Press reported.

The Bank of Myanmar's declaration that foreign currency bank deposits must be changed to kyats (currency of Myanmar) within one day of receipt was met with fierce opposition from international governments and business organisations. According to The Associated Press report, this approach seems to focus on addressing a hard currency shortage following the military takeover of Aung San Suu Kyi's elected administration. However, it might add daunting dangers to the investors whilst doing business in Myanmar.  

Myanmar's economy has suffered due to the significant public opposition to the military coup and the COVID-19 outbreak. As a result, tourists have not travelled to the nation, further reducing foreign exchange profits required to pay for imports of gasoline, food, and other needs, as well as repay foreign loans. 

Following the Myanmar military's takeover, the United States and other predominantly Western nations have slapped targeted sanctions on the military, its leaders and families, and army-affiliated enterprises, as well as freezing their assets held in those nations. However, it is still unclear how much the military's leadership and budget have suffered as a result of the restrictions, AP reported. 

Myanmar denies reports of fuel shortage 

Furthermore, reports and social media posts claiming that the nation might be running out of petrol, with enormous queues of automobiles building outside service stations in recent days, were also rejected as "myths" by the Tatmadaw. In a joint statement, Aung Naing Oo, the army-installed government's minister for Investment and Foreign Economic Relations, and Maung Maung Ohn, the Minister of Information, stated that the current power outages have been exacerbated by rising liquefied natural gas prices, Myanmar's diminishing currency, and damage to power lines by "terrorist forces", referring to armed groups fighting the Myanmar military. 

In addition to this, the central bank's order, according to Aung Naing Oo, was enacted to stabilise the currency rate when the kyat plummeted below 2,000 to the dollar. He said that the military administration was working on "standard operating procedures" for financial transactions, but that international corporations and anyone that met certain criteria would be exempted automatically. Businesses working in Myanmar's lone special economic zone, Thilawa, south of the country's largest city, Yangon, are among those affected, he added. 

(Image: AP)