The junta-controlled Central Bank of Myanmar (CBM) instructed local banks on Thursday afternoon to buy the remaining US dollar balances held in the foreign currency accounts of businesses, organisations and individuals by 6pm that day.
The instruction is part of an ongoing effort by the CBM to restrict the retention of foreign currency as part of the military’s desperate attempts to gain control over the domestic flow of international monies.
The latest order will affect nearly all businesses registered at the Directorate of Investment and Companies Administration (DICA), including local companies with up to 35 percent foreign ownership, a source familiar with the matter told Myanmar Now.
The individual said that financial institutions were still clarifying the scope of the order with the CBM at the time of reporting.
An exception was reportedly made for Foreign Direct Investments (FDIs) run with the permission of Myanmar Investment Commission and those entities operating in Special Economic Zones (SEZs). Both were spared from a mandatory currency conversion policy launched by the central bank in April.
At that time, the CBM ordered financial institutions with authorised dealers’ licenses to convert US dollar transfers within one business day of receipt into local currency at a fixed exchange rate of 1,850 kyat per dollar.
Following criticism from embassies and international chambers of commerce, the CBM backtracked the directive on April 17 and exempted several types of businesses and organisations from compliance, including the FDIs, SEZ companies, as well as foreign diplomats and staff members of the UN and other recognised international development agencies. In another June order that was revoked a month later, the CBM also issued an exemption for companies that had at least 10 percent foreign ownership.
In mid-July the central bank again ordered companies with a foreign ownership stake of up to 35 percent to exchange their international currency to kyat in banks by 6pm of July 18.
Two days before that order was issued, the CBM called on local companies and banks to suspend and reschedule the repayment of foreign loans.
Due to the junta’s mandatory currency conversion policy and its shifting orders, the dollar value had risen to more than 2,000 kyat in Myanmar’s black market at the time of reporting, and the prices of fuel and imported goods had increased in recent months.
Given the junta’s unpredictable policies, the earlier source remarked that the CBM could likely impose new currency conversion requirements on the FDIs and SEZ companies currently spared from the directives.
In a new economic monitor report released on Thursday, the World Bank said the junta’s recent policy shifts are likely to have lasting effects on the country’s growth and economic stability.
“Trade and foreign exchange restrictions have unwound previous reforms to liberalize trade and unify the exchange rate,” the report said in the press release.
“Lessons from Myanmar’s economic history suggest that to the extent that these trends continue, investor confidence and the business environment will weaken further, constraining Myanmar’s growth potential over the longer-term.”
The few released from the new restrictions include individuals and institutions closely tied to foreign direct investment in Myanmar and diplomatic missions
A former information minister close to the military becomes the latest to condemn the regime’s campaign of wholesale destruction in Upper Myanmar
According to the Mone Hla defence team leader, the column responsible for the raid on the village consisted of around 80 regime soldiers based in Kar Boe, a village in Kanbalu Township.
It was the same column that raided and torched the predominantly Muslim villages of Kyi Su and Kyauk Taing the day before, he added.
He also claimed that his defence team inflicted heavy casualties on the regime forces as they left the neighbouring village of Pin Sein Khin in Ye-U Township before reaching Mone Hla.
“We attacked them with explosives and killed seven of them. We also opened fire on them when they tried to recover the bodies, killing 15 more,” he said.
Forced to pull back to Pin Sein Khin, the junta troops opened fire with heavy artillery, killing a 40-year-old woman named Mya who was trying to flee the conflict, he added.
After reaching Mone Hla in the evening, the regime forces burned down roughly a third of the village, according to a resident who returned over the weekend.
“The village is now in complete ruins. They even destroyed the high school,” he said.
Mone Hla was also targeted by airstrikes in July, when three helicopters fired artillery shells at the 700-household village, reportedly hitting a local church and other religious buildings.
The village is the birthplace of Cardinal Charles Maung Bo, the Catholic Archbishop of Yangon, who in May of last year appealed to the military to refrain from targeting religious sites after four people were killed by artillery fire while sheltering inside a Catholic church near the Karenni (Kayah) capital Loikaw.
Despite continuing attacks, however, he appeared in public with junta leader Min Aung Hlaing during last year’s Christmas holidays, provoking a strong outcry from critics.
The cardinal, who was elected by Pope Francis in 2015, has met with the junta chief twice since the military seized power in February 2021.
The boy was shot as he fled approaching junta soldiers and a member of a local defence team was beheaded after being caught scouting the area
His arrest came amid reports that people in Magway Region had been tortured into confessing he was a member of the PDF