On 30 September 2022, the Foreign Exchange Supervisory Committee (“FESC”) of the Central Bank of Myanmar (“CBM”) issued Letter No. FE-73 (23/2022) as a result of discussions held during meeting No. (53/2022).
The letter has allowed fuel import entities to make repayments of financing agreements in Chinese yuan (“RMB”) in a bid to prevent delays in oil distribution to consumers in Myanmar. The measure was introduced in part because of decreasing availability of US dollars (“USD”).
Letter No. FE-73 (23/2022) states that fuel importers who acquired foreign currencies through trade financing agreements are allowed to make payments in RMB for certain portions of the SWAP Facility received from fuel companies and payments in RMB for fuel costs in the future.
For acquiring SWAP through a USD trade financing agreement, authorized dealer (“AD”) banks are required to provide services for retail sales of foreign exchange earnings from
- Entities (Myanmar kyat conversion policy exempted)
- Individuals in foreign currency from abroad
- Income from Worker Remittances
- USD purchased from 35% of export earning
AD banks must arrange the repayments of SWAP and carry out the acquisition of trade financing depending on the repayment amounts.
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