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Myanmar orders foreign money held by banks changed to kyats

BANGKOK (AP) – An order by Myanmar’s central bank that all foreign currency in bank accounts must be converted into the local currency has many in the military-ruled country worried over potential losses.

Businesses and individuals were told in a notice issued on Sunday that as of Monday they must convert dollars and other foreign currency into kyats within one day or face legal consequences.

Foreign currency can only be sent overseas with government approval, it said. It said further details of the rules would follow.

Myanmar’s military leaders are facing a raft of sanctions after they seized power on February 1, 2021, ousting the country’s elected government. The order to hand over foreign exchange suggests the authorities may be running short of hard currency needed to pay debts and purchase key supplies such as oil, gas and weapons.

Hard currency is also needed to repay foreign debt, which for Myanmar stands at about USD10-USD11 billion.

The central bank order instructed holders of foreign currency accounts in Myanmar to open new accounts to convert funds into kyats. People earning foreign currency are supposed to also convert their money into kyats, which are not a convertible currency and are not supposed to be taken out of the country.

An official from Kanbawza Bank said on Tuesday that some traders and sailors had come in to inquire about opening the required new business accounts but most said they would “think about it”.

The bank staffer, who spoke on condition they not be named because they were not authorised to speak to media, said account holders were worried they would lose money since the exchange rate set by the central bank, MMK1,850 per dollar, is below the prevailing black market rate of MMK2,030 per dollar.

A man shows new currency notes outside Myanmar Economic Bank in Yangon. PHOTO: AP