The Japanese Embassy in Myanmar has asked the junta’s Ministry of Foreign Affairs to exempt Japanese companies and governmental organizations from the new directive that foreign exchange earnings must be converted into kyats at the official rate within one working day.
An embassy letter said: “Japanese companies operating in Myanmar will face serious challenges in following this new regulation, which will cause difficulties in continuing their businesses in the country.”
The Central Bank of Myanmar’s order will also affect the embassy and other official organizations, like the Japan International Cooperation Agency and Japan External Trade Organization, the letter said.
The embassy asked for an exemption for Japanese companies and official organizations, citing the “bilateral relationship”.
The new rules say foreign exchange must be deposited in foreign currency accounts at licensed banks and must be converted into kyats within one working day. It says separate notifications will be issued for exemptions, which inspired the Japanese letter.
The new directive is reportedly already harming exports.
A businessman told The Irrawaddy: “The central bank tells us to convert foreign exchange into kyats within 24 hours. But the maximum amount of cash companies can withdraw [per week] from their bank accounts is 100 million kyats [US$56,000]. It will further worsen the cash flow crisis.”
While foreign exchange will be converted at the official rate of 1,850 kyats per US dollar, the market rate is around 2,050 kyats, which will hammer exporters, he added.
The new rules will create a dollar crisis and boost the black market, he said.
