foreign currency byforeigners visiting Myanmar. One FEC technically is equal to one US dollar. FECs areaccepted by government agencies and certain vendors established to use by the Central Bank of Myanmar since 4 February, 1993.
: which is the preferred foreign exchange currency, but cash dollars can be usedlegally by locals only at establishments licensed to accept US dollars. While banks will alsobuy Euros and Singapore dollars, for every day transactions US dollars may be used intransactions, if they accept foreign currency at all.Before 1
April 2012, t
he “official exchange rate”
was approximately 6.00 kyat per one US dollar, thisofficial exchange rate regime was abandoned on 1
April 2012 in favor of a managed market exchangerate. The free market rate as of May 2012 was approximately 830 kyat per one US dollar. Thegovernment sometimes issues an internal notification of the market exchange rate for tax purpose onlyto calculate the exchange rate loss and profit for tax payers. In October 2011, the government licensedexchange rate centers where legal foreign exchange currency earners can change US$, Euros,Singapore Dollars and FECs with kyat. Currently, the government is taking steps in consultation with
IMF on reforming the country’s exchange rate system.
When the Foreign Investment Law was enacted, only two banks, the MFTB and MICB were permittedto operate foreign bank and foreign exchange transactions. Recently, the authorities have grantedpermission to Co operative Bank, Kanbawza Bank, Asia Green Development Bank and Aye-yarwaddyBank to operate as foreign banks in ASEAN countries, notably Thailand, Singapore and Malaysia.These banks require official authorization from the Central Bank of Myanmar to actually carry outtransactions.Foreign investors doing business in Myanmar should know that some types of investment will require
part of the capital to be “imported” in amounts determined at the “official exchange rate” (but usuallynot “exchanged” at the official rate). This initial investment capital may be held in a foreign currency
account at one of two government operated foreign currency banks, namely Myanmar Foreign Trade
Bank (“MFTB”) and Myanmar Investment and Commercial Bank (“MICB”) in US$, Euro, Singapore
Dollars, or in FECs.
GENERAL LAWS GOVERNING DOING BUSINESS
“Information Minister Kyaw Hsan announced in August 2011 that the Myanmar Government would begin phasing out FEC.”
[http://www.dvb.no/news/govt-to-phase-out-fecs-cut-export-taxes/17047] This will likely come as part of the overhaul the government isplanning, in consultation with the IMF, expected to be tabled some time during 2012.