Jun 16, 2022
Myanmar Bans Car Imports to Shore Up Foreign-Exchange Reserves
(Bloomberg) -- Myanmar has banned car imports in an effort to shore up dwindling foreign currency reserves that have been under pressure due to soaring energy and food costs and weakness in the kyat.
Major General Zaw Min Tun, lead spokesman for the State Administration Council, announced the ban on bringing in vehicles at a press conference Thursday. “We’ve been systematically managing the use of foreign currencies in the country to prevent the outflow from unnecessary imports,” he said.
Myanmar’s currency lost a third of its value against the dollar last year after the coup triggered a freeze on parts of the nation’s foreign reserves held in the US and suspension of multilateral aid -- both key sources of foreign currency supplies.
The government has been restricting imports of luxury items, while prioritizing purchases of essential goods like fertilizers and agricultural imports to support local production. In April, the central bank ordered holders of foreign currencies -- mainly US dollars -- to exchange them for kyat within one working day of receiving them, but later exempted most foreigners.
The Southeast Asian country -- where civilian leader Aung San Suu Kyi was toppled in a coup last year -- has been been dealing with severe power blackouts as it struggles to import enough fuel. The country continues to be severely tested by the impact of the military takeover and the surge in virus cases in 2021, the World Bank said earlier this year.
Zaw Min Tun said meetings are being held twice a week to approve importers’ requests to buy US dollars for importation purposes. Once approved, traders can buy the currency at at the central bank’s reference rate of 1,850 kyat per dollar. The regime is also allowing the use of yuan and baht for trade along the Chinese and Thai borders, he said.
©2022 Bloomberg L.P.