The junta-controlled Central Bank of Myanmar (CBM) announced it had revoked the licenses of another 123 currency exchange companies on Tuesday, raising the number of licenses revoked within the last 11 months to 168.
The CBM took similar actions last October and this year in January, March, July and August against a total of 45 companies including Myanmar National Airlines, saying the companies had failed to comply with the bank’s rules and directives.
In its announcement on Tuesday, the CBM cited the same reason for its latest move to revoke currency exchange permits.
Companies whose licenses were revoked on Tuesday included trading firms, travel & tour operators, construction groups, hotels including Yangon’s luxury Sedona Hotel, and financial services companies.
Economists and currency traders describe the junta’s move as an effort to gain control of foreign currency flows and a futile bid to prevent the national currency from depreciating further.
U Ngwe Thein, a retired Myanma Economic Bank executive, said last month that the junta is attempting to control movements of foreign currency by canceling the licenses.
He said the regime is aiming to drag the economy back to conditions experienced before democratic transition.
Before political and economic liberalization began in 2011, US dollars could only be bought and sold at a handful of banks permitted to conduct currency-exchange services.
These restrictions spawned a thriving black market, however. People who needed to exchange foreign currency into kyats or vice versa relied on illegal traders whose rates were higher than the fixed rates imposed at the few banks licensed for foreign exchange services.
The CBM’s current reference exchange rate is 2,100 kyats per dollar. But the black-market rate is far higher at 3,500 kyats per dollar.
