Junta approves Thai baht as official settlement currency

By Admin 16 Aug 2023

DMG Newsroom
16 August 2023, Sittwe

Myanmar’s military regime has accepted Thai baht as official settlement currency for international transactions and clearing.

The junta-controlled Central Bank of Myanmar in an announcement on August 14 said banks with authorised dealer licences are allowed to use Thai baht as official settlement currency in order to facilitate international transactions and clearing.

“We welcome the move to use Thai baht for international transactions. It is easier to trade now compared with the past when we had to make trade depending on the kyat-dollar exchange rate. As the Myanmar kyat is depreciating, we hope the move will also affect the baht-kyat exchange market,” said a border trader in Kayin (Karen) State’s Myawaddy.

The move is motivated by the foreign currency crisis Myanmar’s regime is facing, said a CBM source. The move followed a decision by Singapore’s UOB to cut ties with banks in Myanmar.

“It has chosen Thai baht as a foreign currency for international transactions and clearing because of growing economic sanctions, and Singapore’s sanctions against businesses in Myanmar,” said the source.

“In a confidential note sent to Myanmar banks last week, United Overseas Bank said it would restrict all incoming and outgoing payments to and from Myanmar accounts, allowing funds to be moved only between accounts held with the bank,” Nikkei Asia reported. “It also announced tough new curbs on Visa card and Mastercard transactions for Myanmar individuals and banks, which would restrict their dealings only to accounts within UOB. In addition, UOB said it would close Myanmar banks’ ‘nostro’ accounts at its Hong Kong branch — foreign currency accounts banks hold at overseas counterparts to facilitate trade.”
 
The current exchange rate is around 103 kyats per baht.
 
Last year, the regime began accepting the Thai baht for settling border trade transactions at its border crossings with Thailand.