Myanmar restriction may impede new forex licensing

Author: Brian Yap | Published: 21 Dec 2015

Myanmar’s new restrictions imposed on its second round of foreign bank licensing due early next year have confused market participants.

The Central Bank of Myanmar (CBM) announced last Tuesday that it would invite foreign banks to open branches onshore early next year. But only banks from countries that have not been granted licenses will be eligible.

Counsel have dismissed the CBM’s move as one that could backfire on the country’s efforts to attract more foreign direct investment to its nascent banking sector.

"It is unknown why the Central Bank has adopted this policy. Ultimately it is a restriction which may backfire," said Alessio Polastri, managing partner at Polastri Wint & Partners in Yangon.  "You want the most suitable and reputable banks in Myanmar regardless of where they are from or in which country they...