Myanmar revokes forex licences

Yangon, October 19

Myanmar businesses ranging from restaurants to golf clubs have until the end of next month to stop charging in US dollars, the central bank announced in a snap move to stabilise the kyat currency.

Banks and official money changers will still be allowed to exchange dollars for local currency but a host of firms, many in service sector, will have to return their permits. Special licences enabling firms to convert US currency will be revoked to combat ‘dollarisation’, Central Bank of Myanmar said in a statement.

“Because of payments and sales in dollars, there has been dollarisation leading to an increased need for dollars, weakening the ‘Kyat’ and causing exchange rate instability,” it said.

The kyat has lost around 20 per cent of its value against the dollar in the last six months. The official rate today was 1,283 to dollar.

The central bank said affected businesses would have until November 30 to hand back their licences.

Those include hotels, restaurants, airlines and duty-free shops, meaning tourists may soon have to carry wads of local notes.

Myanmar, which in 2011 shrugged off the isolation and economic hardships of military rule, has won praise for reforms in recent years, including giving autonomy to the central bank and adopting a floating rate for the kyat.

The first handful of foreign banks permitted to operate in Myanmar in decades opened in April.