Regime's Foreign Currency Restrictions Push Myanmar Toward Bankruptcy

New restrictions on U.S. dollars introduced last week by the Central Bank of Myanmar (CBM) have come as a crippling blow to businesses already struggling in an economic recession resulting from post-coup political turmoil and the COVID-19 pandemic, The Irrawaddy reported. The new restrictions saw the bank revoking the exemption from mandatory currency conversion given to companies with a minimum 10 percent foreign ownership. In April, the CBM ordered financial institutions to convert foreign currency earned by its customers into kyat within one business day at an official exchange rate of 1,850 kyats to the U.S. dollar, as the military regime was desperate for U.S. dollars. In June, following requests and criticisms, the bank exempted companies that are 10 percent or more owned by overseas entities from the mandatory currency conversion. At the same time, the bank has also ordered companies and individual borrowers to suspend repayments of foreign loans, both on the interest and the principal loan. Companies in Myanmar have at least US$1.2 billion in outstanding dollar-denominated loans, according to Bloomberg. Those borrowers include telecom company Ooredoo Myanmar Ltd., City Square Commercial Co., a real estate firm, and telecom tower companies Apollo Towers Myanmar Ltd. and Irrawaddy Green Towers Ltd. Read more.