Junta imposes tighter deadline for repatriating export earnings

The Myanmar junta is requiring that exporters deposit their foreign currency-denominated revenue in Myanmar banks within a shorter time frame, a regime-controlled newspaper reported on Tuesday. The intended effect of the requirement, which imposes shorter deadlines for depositing foreign currency in domestic banks, is to channel foreign funds into the junta-controlled banking system and augment Myanmar’s foreign currency reserves. The new rule requires traders to repatriate their export earnings from Asian countries 30 days or less after receiving them, reduced from the previous maximum interval of 45 days, while the interval for depositing revenue from exports to countries outside of Asia is now reduced from three months to two. Exporters failing to deposit their earnings within the required timeframe are subject to prosecution under the Foreign Exchange Management Law. The Myanmar military council is also blacklisting or temporarily suspending the trade licenses of businesses that fail to comply with the rules. An economics expert from Yangon, who asked not to be identified, said that the new deadlines would cause significant strain for exporters who are paid in American dollars, discouraging them from selling to buyers abroad. He also emphasised the vital importance of having dollars in reserve to import essential goods in short supply such as fuel, cooking oil, and medicines. “Now, businessmen are reluctant to continue export operations. Without exporters, importers can't sustain their business either. They don't know what to do," he said. Myanmar Now attempted to reach Aung Aung, director general and spokesperson for the junta-controlled Central Bank of Myanmar (CBM), for comment on the new policy changes but did not receive a response. Since the military coup of 2021, the military council has controlled all means of foreign currency exchange and has frequently changed the rules and requirements affecting exports and other transactions using foreign currencies. Exporters have faced particularly debilitating regulations on the use of their earnings, including a rule that at one time required them to convert all dollar-denominated revenue into Myanmar kyat at a rate fixed by the regime. Later, authorities gradually reduced the percentage of export earnings to be exchanged for kyat at the fixed rate. Currently, the rules require 35 percent of export earnings to be exchanged for kyat at the undervalued rate of 2,100 kyat to the dollar, and for the remaining 65 percent to be sold on the CBM-controlled online foreign exchange market. According to Myanmar’s Federation of Chambers of Commerce and Industry, instead of selling foreign currency to the junta at the fixed rate, exporters of certain goods such as rice, beans, and corn are also allowed to use some of their foreign revenue to import fuel oil themselves or sell it to fuel oil importers.

Junta imposes tighter deadline for repatriating export earnings

The added strain on exporters may have the opposite of the intended effect, shrinking the dollar reserves Myanmar needs to import scarce fuel and other essentials, one expert predicted

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