CNI News

2 Feb 2024

A system in which rupees and kyats can be used in direct paying could be started in February, said the Central Bank of Myanmar. 

There will be a decline in the need of US dollars in paying for the products including medicine mainly imported from India by implementing the system.

Moreover,  there will be advantages such as easier payment, smooth flow of goods and better bilateral relation. India-Myanmar border trade could not be opened up to now. So, the system would not take effect for the time being, U Ne Win Soe, In charge of the Region, Myanmar Trade Promotion Organization ( Ayeyarwady Region), told CNI News.

" Some say the current situation is convenient. Others say it will be more convenient if rupees can be directly exchanged to kyats. It's 50-50. Because dollars are not needed in the middle anymore. It's more convenient if it is realized. But how will it be implemented due to territorial instability. I don't think it will work because of instability on this side." he said.

However, the direct paying system with Indian rupees and Myanmar kyats could not be used at the maritime trade, said traders.

Myanmar kyats

The regulations regarding payment for trade would be cooperated by the Union of Myanmar Federation of Chambers of Commerce and Industry (UMFCCI) and the Indian Traders Association, according to the Central Bank of Myanmar. 

However, there is a gap between the Central Bank's exchange rate and market rate at the border trade. So, the price of Myanmar kyat was needed to be stable, U Khin Maung, a border trader, told CNI News.

" Mainly, it's necessary to have territorial stability and make the price of Myanmar kyat stable. The price of Myanmar kyat is declining so much. At the currency exchange of the border trade, the price designated by the Central Bank is different from the market price. So, traders are worried that they will make a loss." he said.

The authorized banks are the UAB Bank and the CB Bank on the Myanmar side for the direct payment with rupees and kyats and on the Indian side, the Punjab National Bank reportedly.