CBM invites private money changers

Black market money changers might soon be a thing of the past following an announcement last week in the state-run press inviting companies and individuals to set up private money changing counters.

The notice, printed in the Myanmar version of the New Light of Myanmar on December 5, said the Central Bank of Myanmar had invited interested parties to apply for licences, although it set strict requirements.


Private money changers interested in applying for an official licence must arrange for external audits of their accounts, provide background information on their history of dealing with foreign exchange, proof of well-managed accounting practices, as well as links with banking associations.

U Win Myint, a money changer in Kyauktada township, said he had read the Central Bank notice but worried that there were too many rules and regulations to follow.

He said interested parties also needed to set up a company, a process that can cost up to K1 million, deposit K30 million in a bank, and show proof of a further K10 million for each branch, he said, adding that branches were required to undergo weekly audits.

“I’m interested in applying for a licence but I need to talk to the Central Bank because there are a lot of requirements to meet,” he said.

Central Bank deputy director general U Win Thaw said the foreign currency exchange market is growing daily and the decision to allow new private changers to take part would result in better rates for consumers.

“We’ve heard that the previous arrangement was like a monopoly and that the Central Bank’s daily exchange rate was basically being managed by the private banks [that take part in daily exchange auctions]. But if it’s opened to new competitors up then people will not be able to make that criticism,” he said.

He added that the Central Bank hoped that inviting black marketeers to apply for official licences it would be able to finally destroy the black market.

Co-operative Bank managing director U Pe Myint said money changing counters are distractions for private banks that should be focussing on other business, and it would be good to see private changers enter the market.

Banks and official money changers are allowed by the Central Bank to set an exchange rate within 0.8 percent of the daily auction rate, he said, adding that banks usually offer the highest rate.

The daily rate on December 7, as shown on the Central Bank’s website, was K853 to the dollar, while money changers were offering K843-852 and the black market rate was K845-850.

The bank allowed six private banks to open money changing booths on Theinbyu Road in October last year but the network has expanded to include booths at airports, hotels, shopping centres and banks operated by 18 banks.

The Central Bank also started a managed float of Myanmar national currency on April 1, while legislation was passed in August allowing citizens to legally hold US dollars.

source: The Myanmar Times
http://mmtimes.com/index.php/business/3507-cbm-invites-private-money-changers.html