CNI News
8 August 2024
The Indian Government has approved the Myanmar eight banks to carry out payment by rupee and kyat and being able to pay like that cushions entrepreneurs, economic analysts told CNI News.
Although Myanmar is carrying out trade payments through Singapore bank, international sanctions have imposed on Myanmar.
Direct trade is better and if the payable system by rupee and kyat was successful, it would cushion entrepreneurs. But the problem of Myanmar was that exchange rate could not be controlled, an economic analyst told CNI News.
" The problem is that in Myanmar, exchange rate can't be controlled. No matter trade is done by rupee, or baht or yuan, if you pay by kyat, they don't want to receive it. But, after you exported goods, if you buy things with baht or yuan you had received, it would be OK. At any rate, the money obtained from trade is changed into dollars and then, trade. In comparison with that, the system that will be carried out now can reduce steps, risks and costs. So, it will cushions entrepreneurs." he said.
An India-Myanmar border gate
As the Myanmar side proposed 11 banks including Myanmar Economic Bank to carryout out payments by kyat and rupee, the Indian Government approved eight banks.
They are UAB, CB, Global Treasure Bank, Yoma Bank, Ayeyarwady Farmers Development Bank, Myanmar Citizens Bank, Ayeyarwady Bank and Shwe Development Bank.
These banks must use the Special Rupee Vostro Account to pay by rupee and kyat for the trade between Myanmar and India.
The Central Bank of Myanmar has released it would go on carrying out to make six remaining banks participate in the process.
Although Indian rupee is not as widely used as the Chinese yuan, it is stronger than the Russian ruble; allowing like that was better, U Htay Aung Kyi, a banking expert, told CNI News.
While seeing trucks
" That India accept Myanmar kyat is good. The announcement makes sense. There must be a contract in which the Indian Government must accept Myanmar kyat. Myanmar must accept rupee because all other currencies are stronger than Myanmar kyat. Indian rupee hasn't included in the common currencies in the world. But the Chinese yuan has included. It has taken even the place of Japan." he said.
Myanmar is exporting pulses and other commodities to India while India is exporting medicines and other commodities to Myanmar.
The Reed Border Gate, No.2 India-Myanmar Border Gate has been temporarily closed by the Indian authorities because of the complaint that dried betels from the Myanmar side were being illegally imported.
