BANGKOK (AP) — Myanmar’s military-led administration has agreed to accept the Thai baht as the official currency in border trade transactions and is planning a similar arrangement for the use of the Indian rupee, seeking to limit reliance of the country against the US dollar in trade.
The State Administrative Council said on Tuesday that Myanmar began allowing direct currency settlements using the Chinese yuan with its kyat earlier this year. Settlements in Thai baht will be made online in accordance with regulations set by Myanmar’s central bank, it said in a statement.
Myanmar’s economic crisis worsened after its military seized power in February 2021 from the elected government of Aung San Suu Kyi. Opposition to the military takeover turned into armed resistance that some UN experts have described as a civil war.
The unrest, sanctions against military leaders and the pandemic have combined to strain the country’s ability to earn foreign currency. Meanwhile, the value of the kyat plunged.
By developing direct conversion of other currencies in border trade, Myanmar intends to reduce its dependence on the US dollar by up to 70 percent, according to the statement quoted by Maung Maung Ohn, Minister of Foreign Affairs. Information, and Aung Naing Oo, Minister of Investments and Foreign Economic Relations. , as the saying goes.
Thailand is Myanmar’s second largest trading partner after China, with border trade at five checkpoints – Tachileik, Myawady, Kawthoung, Myeik and Hteekhee – amounting to $4.3 billion in FY 2020-2021 , up from $3.9 billion a year earlier, the statement said.
“Myanmar’s immediate neighbors account for up to 70% of the country’s total trade volume. Direct settlements in currencies other than the dollar will help expand and facilitate bilateral trade, movement of goods and other forms of payment and settlement,” the statement said.
He blamed hard currency shortages and the collapse in the value of the kyat on “economic sabotage” by opponents of the military takeover and “foreign elements”.
The statement also blasted some unnamed countries for trying to block Myanmar’s inclusion in the Regional Comprehensive Economic Partnership, or RCEP.
The Philippines and New Zealand have said they will reject Myanmar’s inclusion in what is expected to become the world’s biggest free trade pact.
“For all member countries to benefit from economic integration, an inclusive way is needed in ASEAN.” the statement said. “No country should lag behind in regional economic integration. Unfortunately, some of ASEAN’s directions and actions seem incompatible on the ground,” he said.
Myanmar plans to brief members of the Association of Southeast Asian Nations at a meeting of economic officials this week, Aung Naing Oo said.