The Central Bank of Myanmar (CBM) stated in its Instruction No.5/2019 that starting on 5th February, exchange rate will be computed and published based on transactions in the foreign exchange market. The rate is indicative rate and participants in foreign exchange market are not required to use it in their transaction. It is mentioned that the rate may be used to determine custom duties and to make currency revaluations and statistics as needed in practice.
Late last month on the 29th, CBM announced that foreign banks/ financial institutions are permitted to own up to 35 percent equity in local banks. The move implements the provisions of the Companies Law, which came into effect last August. The law allows foreign investors to acquire up to 35 percent equity ownership in local firms without requiring them to change the company nature. However, it is required to submit relevant investment agreement and other supporting documents to the CBM to receive approval.
In the same month, CBM also issued a Directive No.1/ 2019 with regards to lending rates amendment, which is effective from 1st February onward. The lending rates on properties such as land, building, gold, diamond and precious stones, saving certificate, government treasury bonds, security and transferable contracts, pledge, loan with credit guarantee, loan based on pledge occasionally announced by the CBM must not exceed 13% interest. Likewise, lending rates for loans without collaterals must not exceed 16%. Minimum interest rate on saving bank deposit and saving certificate still remains the same at 8%.
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