Myanmar orders foreign money held by banks changed to kyats

An order by Myanmar's central bank that all foreign currency in bank accounts must be converted into the local currency has many in the military-ruled country worried over potential losses. Businesses and individuals were told in a notice that as of Monday they must convert dollars and other foreign currency into kyats within one day or face legal consequences. Foreign currency can only be sent overseas with government approval, it said. It said further details of the rules would follow. Myanmar's military leaders are facing a raft of sanctions after they seized power on Feb. 1, 2021, ousting the country's elected government. The order to hand over foreign exchange suggests the authorities may be running short of hard currency needed to pay debts and purchase key supplies such as oil, gas and weapons.
Hard currency is also needed to repay foreign debt, which for Myanmar stands at about 10- 11 billion. The central bank order instructed holders of foreign currency accounts in Myanmar to open new accounts to convert funds into kyats (pronounced CHUHTs). People earning foreign currency are supposed to also convert their money into kyats, which are not a convertible currency and are not supposed to be taken out of the country. After the military took power last year, Western governments imposed targeted sanctions on the military, military affiliated companies, officials and their families. Their foreign assets were frozen, at a time when the country had lost a large share of earnings from tourism due to the pandemic. Myanmar's foreign reserves stood at nearly 7.8 billion as of December 2020, according to the World Bank.