Monthly Business Brief, November 2022
Banking and Finance
The US dollar exchange rate in Market seemed to be stable during November, compared to the previous months. Last August, a dollar hit over MMK 4,000 in the black market. At present, the dollar was exchanged at MMK 2,860 for buying and MMK 2,880 for selling while the Central Bank of Myanmar (CBM) set the reference exchange rate at K2,100.
On 18 November 2022, the CBM announced that export earnings can be made in Chinese Yuan and Thai Baht in addition to the US dollar. In order to make Yuan and Baht payments, the traders need to apply for a license. As per the US dollar policy, 65 per cent of earnings must be exchanged for local currency at the CBM’s reference foreign exchange rate, while exporters can use 35 per cent of export earnings or sell them on to others with an over-the-counter rate within one month.
Starting from 1 November, imports are to be allowed based on the export earnings or flows of funds and the initial stage of this move will commence in Myanmar-Thailand border areas, according to 31 October 2022 of the Trade Department under the Ministry of Commerce. To improve Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) measures and follow the Action Plan of the Financial Action Task Force (FATF), banking will be utilized in settling border transactions. Imports will be allowed only with the banking system in border transport.
On 11 November 2022, the Ministry of Commerce released the announcement upon the import rules for electric vehicles (EV) in the pilot project. Here are some of the rules the importers have to follow:
- The importers must abide by the standards and import quota set by the national-level leading committee on development of electric vehicles and related business.
- The companies must register with the Directorate of Investment and Company Administration whether it is a joint venture or wholly citizen-owned business.
- They must show the sales contracts with exporting companies. They have to be sought approval from a national-level leading committee on the development of electric vehicles and related business. There must be an EV warranty, spare parts availability, and service and maintenance of those vehicles.
- The companies must seek permission from the MoC to register with the Road Transport Administration Department.
- The rules in the directive are effective between 1 January 2023 and 31 December 2023. Further amendments are to be made if necessary.
In the past seven months (April-October) of the current financial year 2022-2023, a total of 35 foreign enterprises pumped US$179 million into Myanmar’s manufacturing sector including capital expansion by the existing enterprises, as per the statistics released by the Directorate of Investment and Company Administration (DICA). Myanmar attracted foreign direct investments of $1.45 billion from 52 enterprises during April-October period 0f 2022. The majority of the investments brought into the manufacturing sector.
In addition, according to the Directorate of Investment and Company Administration (DICA), a total of 4,100 companies have been struck off the register in the past ten months as they fail to submit annual returns (AR) on the online registry system, MyCO. In 2022, 400 companies each in January, February and March, 300 in April and 500 in May, 400 each in June and July, 55 in August and 400 each in September and October did not file annual returns on MyCO respectively.
In order to continuously control the infection of COVID-19, the rules and restrictions have been extended until the end of December 2022.
The government issued an announcement on the control of COVID-19 to take tests with RDT will be relaxed for travelers to Myanmar by international commercial flights if they show COVID-19 vaccination record cards as a proof of being fully vaccinated or if the travelers who are not fully vaccinated show the RT-PCR test results within 48 hours before their arrival to Myanmar on 1-12-22. The details will be published in Public Health Requirements for travellers who wish to enter Myanmar through International Commercial flights on 1-12-22. However, the public health requirements for travelers by relief flights and travelers via land borders will remain the same as previous requirements on COVID restrictions.
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