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Myanmar Orders Companies, Banks to Suspend Foreign Loan Repayments: Media


Myanmar's Prime Minister and State Administrative Council Chairman Min Aung Hlaing attends a meeting with Director General of Roscosmos Dmitry Rogozin in Moscow, Russia July 12, 2022. (Roscosmos/Handout via REUTERS)

Myanmar's central bank has ordered local companies and banks to suspend and reschedule repayment of foreign loans, according to local media, its latest effort to exert control over foreign currency flows.

The central bank issued the order on July 13, according to Myanmar Now, a news agency. Reuters could not independently verify the document, which was circulating on social media.

"According to foreign currency law and foreign currency management rules, the repayment of foreign loans including original and interest values should be suspended and licensed banks should rearrange with their customers … regarding repayment schedule," the central bank statement said.

Central bank officials did not answer calls seeking comment.

The kyat currency's plummet against the dollar has driven up fuel and food prices in a country already in crisis since the military seized power in a brutal coup last year, halting a decade of political and economic reforms.

To relieve some of that pressure, the central bank has announced a series of orders on local businesses depositing and exchanging foreign currency at local banks within one working day, and instructing ministries and local governments not to use foreign currencies for domestic transactions.

Last year, the central bank briefly tried tethering the kyat to a reference rate against the dollar after a slump in the exchange rate.

The official central bank exchange rate for the kyat is set at 1,850 per dollar but has tended to be well below the unofficial black-market rate.

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