Foreign businesses protest Myanmar foreign currency rules

BANGKOK (AP) — Foreign business groups in Myanmar have raised concerns about new rules requiring businesses and individuals to convert all foreign currency held in bank accounts into the local currency.

A statement issued Friday by the American Chamber of Commerce and British, French, Australian chambers and similar groups says the requirement to swap all dollars and other foreign currencies for kyats would lower Myanmar standards of living, discourage foreign business activity and foreign investment and cause trade tensions.

“As written, the regulations effectively prevent the use of foreign currency in Myanmar which disconnects Myanmar from the global economy and global financial system,” it says.

“Implementation of these measures and the associated lack of clear exemptions for foreign investments creates significant, and for some, insurmountable challenges to all businesses operating in Myanmar,” the statement says.

The Japanese Embassy in Myanmar also submitted a letter to the government saying Japanese businesses would face “serious challenges” in following the new rules.

It said it also would be detrimental to the operations of the embassy and other official organizations.

Details of the new rules have yet to be announced. But the central bank said in another notice that they would apply to income from export and other sources such as services, investments, loans for investment and other transactions.

The change appears aimed at alleviating a shortfall in hard currency following a Feb. 1, 2021 military takeover that ousted the elected government of Aung San Suu Kyi.

Critics of the new policy noted that limits on bank withdrawals would further complicate its implementation.

The U.S. and other Western countries have imposed targeted sanctions on the military, army-affiliated businesses, military leaders and their families, freezing assets held in those countries.

The economy has slumped amid widespread public resistance to the takeover and the pandemic, which has in turn kept away tourists whose spending accounts for a large share of the country’s foreign exchange earnings.

A deputy governor of Myanmar’s Central Bank was shot at her home on Thursday, days after the tough new regulations were issued. There were conflicting accounts of whether Than Than Swe, appointed to her post after the military seized power, survived the attack.

Myanmar has been ruled by the military for most of the time since it gained independence from the British in 1948. But for about a decade beginning in 2011 the country began a faltering transition toward democracy and its economy began to take off as it opened further to foreign investment.

Some major foreign businesses have opted to leave since the military seized power last year, citing rising risks and a deteriorating business environment.

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