Thailand currency

Myanmar relaxes foreign currency conversion requirements at Chinese and Thai borders

Following the positive response to the recent announcement by the Central Bank of Myanmar (CBM) regarding the exemption of certain foreign direct investment (FDI) projects from foreign currency conversion requirements, the BCM issued a new exemption on 26 April 2022 for exporters and importers. trade at the China-Myanmar or Thailand-Myanmar border.

The CBM Directive (No. 7/2022) extends the currency conversion period (THB-MMK or CNY-MMK) to one month, which means that foreign currency obtained during border trade with Thailand or China no longer need to be converted to Myanmar kyat (MMK) within one day.

Once the export proceeds have been paid into an exporter’s account with an AD bank (i.e. a bank authorized to deal in foreign currencies), the exporter can use the foreign currency as he wishes or sell it to the bank at the official exchange rate within a month. After one month, any remaining unused balance will be sold back to the bank.

Therefore, banks are allowed to transact directly in the foreign currency (i.e., CNY-MMK or THB-MMK) of exporters and importers doing cross-border trade at the China-Myanmar and Thailand-borders. Myanmar. Designated banks may settle imports in foreign currency without seeking the approval of the Foreign Exchange Supervisory Board. Export earnings, on the other hand, must be reviewed by AD banks to ensure that they are deposited in the relevant exporter’s bank account in Myanmar in accordance with the provisions of the Foreign Exchange Management Act and its related regulations.

Foreign currency transactions under the China-Myanmar and Thailand-Myanmar Border Trade Programs must be reported to the Department of Foreign Exchange Management through the Border Trade Module of the Department’s Electronic Reporting System.

The day after the above directive was issued, the CBM issued a separate press release warning relevant parties to strictly comply with the Foreign Exchange Management Act and its related regulations. In particular, holders of a foreign exchange trading license (AD banks) must ensure that the exporters’ accounts receive their export earnings within three months of the actual shipment of the goods; similarly, exporters must deposit their export earnings in their bank account within three months of shipment. Failure to do so may be punishable under the Foreign Exchange Management Act by a fine, imprisonment for up to one year, or both.