The Trade Department of Myanmar under the Ministry of Commerce of Myanmar notified on 23 February that 65 percent of income from rice export through the border area has to be exchanged at the reference rate (K2,100) set by the Central Bank of Myanmar.

Earlier, exporters were allowed to use the whole export income (foreign currency) and did not need to convert them into Kyat at the CBM’s reference rate.

This action will come into force for all rice and rice products exports starting from 1 March 2023 to affect export items equally, the Trade Department of Myanmar notified.

As per the notification released by the CBM on 5 August 2022, as per the US dollar policy, 65 percent of earnings must be exchanged to local currency at the CBM’s reference foreign exchange rate, while exporters can use 35 per cent of export earnings or transfer or sell them on to Authorized Dealers or others with an over-the-counter rate, as per the statement of the CBM dated 16 August.

Nonetheless, as per the meeting 66/2022 of the Foreign Exchange Supervisory Committee of Myanmar, export earnings of some items can be made in Chinese Yuan and Thai Baht in addition to the US dollar.

On 14 December 2021, the Central Bank of Myanmar released a notification that Yuan/Kyat cross-currency settlement in the bilateral transaction was officially allowed in the border areas between Myanmar and China to boost the bilateral cross-border trade, facilitate the trading and bilateral transaction, increase the use of domestic currency following the objectives of the ASEAN Financial Integration.

Nonetheless, the directive released on 30 June said that transactions for the exports of agricultural products including corn, rice, bean and oil crops are to be made in dollars instead of Yuan-Kyat/Baht-Kyat. Also, 65 percent of export income must be converted into local currency at the reference exchange rate of the CBM.

At present, the dollar was valued at over K2,860 in the informal FX market, indicating a large gap in the exchange rate against the reference rate of K2,100, traders said.