{"id":4562,"date":"2023-12-07T23:20:55","date_gmt":"2023-12-07T17:50:55","guid":{"rendered":"https:\/\/asia.businessupturn.com\/?p=4562"},"modified":"2023-12-07T23:20:55","modified_gmt":"2023-12-07T17:50:55","slug":"myanmars-central-bank-ends-forex-rate-setting-authority","status":"publish","type":"post","link":"https:\/\/www.businessupturn.com\/asia\/southeast-asia\/myanmar\/myanmars-central-bank-ends-forex-rate-setting-authority\/4562\/","title":{"rendered":"Myanmar\u2019s Central Bank Ends Forex Rate Setting Authority"},"content":{"rendered":"<div>\n<p>Myanmar\u2019s central bank has reportedly relinquished its role in setting foreign exchange rates, allowing banks and dealers to independently determine rates. This represents a rare relaxation of the country\u2019s stringent foreign exchange controls.<\/p>\n<p>In response to the economic challenges following the 2021 military takeover, Myanmar has implemented measures to curb demand for foreign currencies, including crackdowns on black market trading and the revocation of over 140 money changer licenses this year. The central bank\u2019s recent decision, not officially communicated on its website, lacks a disclosed rationale.<\/p>\n<p>During military rule, Myanmar\u2019s central bank has shifted from a managed floating exchange rate system to relying on administrative controls. These controls include mandates for companies to surrender foreign exchange and report currency transactions.<\/p>\n<p>Additionally, certain exporters are mandated to convert their dollar earnings into the kyat at an official rate set by the central bank. In August, the central bank instructed ministries and local governments not to use foreign currencies for domestic transactions, aiming to alleviate pressure on the local unit.<\/p>\n<\/div>\n<div>Sean Turnell, an Australian economist who served as an advisor to Myanmar\u2019s previous government and was detained alongside some of its key figures, interpreted the central bank\u2019s decision as a signal of distress for the Junta. Turnell, expressing his views on Facebook, highlighted the abrupt abandonment of the fixed exchange rate that the military regime had been striving to uphold since the coup.<\/div>\n<div><\/div>\n<div>Despite signs of stabilization in Myanmar\u2019s economy and currency, as noted by the World Bank in a June report, challenges persist, including weak investment, businesses grappling with rising costs, and difficulties in accessing foreign currency for importing materials.<\/div>\n<div><\/div>\n<div>Myanmar is experiencing a decline in exports and manufacturing due to reduced demand, while the departure of foreign firms has led to a decrease in natural gas reserves, a significant source of revenue, attributed to slower extraction activities.<\/div>\n<div>The impact of Western sanctions on military-affiliated energy companies is anticipated to exacerbate financial challenges, with Tin Tun Naing, the finance minister of Myanmar\u2019s shadow National Unity Government, noting in a recent interview that the military leadership is grappling with financial difficulties and disruptions in crucial supply chains.<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Despite signs of stabilization in Myanmar\u2019s economy and currency, as noted by the World Bank in a June report, challenges persist, including weak investment, businesses grappling with rising costs, and difficulties in accessing foreign currency for importing materials.<\/p>\n","protected":false},"author":367,"featured_media":4568,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[29],"tags":[3046,2224,369,3049,3047,3045,3048,138],"class_list":["post-4562","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-myanmar","tag-floating-exchange-rate-system","tag-foreign-exchange","tag-myanmar","tag-national-unity-government","tag-natural-gas-reserves","tag-sean-turnell","tag-tin-tun-naing","tag-world-bank"],"reading_time":"2 min read","_links":{"self":[{"href":"https:\/\/www.businessupturn.com\/asia\/wp-json\/wp\/v2\/posts\/4562","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.businessupturn.com\/asia\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.businessupturn.com\/asia\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.businessupturn.com\/asia\/wp-json\/wp\/v2\/users\/367"}],"replies":[{"embeddable":true,"href":"https:\/\/www.businessupturn.com\/asia\/wp-json\/wp\/v2\/comments?post=4562"}],"version-history":[{"count":0,"href":"https:\/\/www.businessupturn.com\/asia\/wp-json\/wp\/v2\/posts\/4562\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.businessupturn.com\/asia\/wp-json\/wp\/v2\/media\/4568"}],"wp:attachment":[{"href":"https:\/\/www.businessupturn.com\/asia\/wp-json\/wp\/v2\/media?parent=4562"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.businessupturn.com\/asia\/wp-json\/wp\/v2\/categories?post=4562"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.businessupturn.com\/asia\/wp-json\/wp\/v2\/tags?post=4562"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}