Shortage of US dollars Forces Temporary Halt on MyanmarExports Rakhine State

NarinjaraNews, April 10,2023

The Rakhine State Federation of Chambers of Commerce andIndustry, has reported that Myanmar-Bangladeshborder trade is being impacted by certain banks in Bangladesh restricting the use of US dollars.

Beginning in the last week of March, Sonali Bank and AgraniBank, both owned by the government of Bangladesh and privately owned respectively, have imposed limitations on theissuance of US dollars to tradersfrom Myanmar.

Sonali Bank, which has been facilitating money transfers forMyanmar-Bangladesh border trade, hasindicated that it has run out of US dollars, and will no longer be issuing themsince the last week of March. Similarly, Agrani Bank has restricted fundsdue to a software issue.

The Rakhine State Federation of Chambers of Commerce andIndustry’s Secretary, UAung Aung, has stated that as aconsequence, Bangladesh traders are finding it challenging to purchase the necessary US dollars from thegovernment for their procurement of goods, and buying commodities from Myanmar owing to shortage of US dollars.

They are refusing to pay in US dollars when making payments.There are restrictions and controls.

So when the money does not flow from the official bank, itis difficult for traders as well," he said.

According to traders, businesses in Bangladesh have placedorders for goods from Myanmar, but due to the lack of available US dollars, they are currentlyunable to make payments for their orders.

As a result, they are encountering challenges and havetemporarily suspended imports from Myanmar.

U Aung Aung, the Secretary of the Rakhine State Federationof Chambers of Commerce and Industry, has also mentioned that there are concernsregarding financial sector-related issues between both countries, which may result in illegal trade inthe future.

“ Ifthere are restrictions on dollars, confidence will decrease. Even if it doesn’t happen now, it will happen in the future. Also we considerthat trades from legal channels may go to illegal channels,” he said.

Traders have reported that bilateral trade activities are encounteringchallenges due to Bangladesh’s struggle with the dollar,as the Central Bank of Myanmar mandates foreign trade to be conducted in foreign currencies.

Currently some goods exported to Bangladesh from theMaungdaw and Sittwe border trade stationson the Myanmar side are being paid solely in Myanmar currency.

The main exports from Myanmar to Bangladesh are freshwaterfish, onions and local products such as coconuts, betel nuts, mungo beans and driedanchovies.

As per the Rakhine State Federation of Chambers of Commerceand Industry, exports from the Sittwe and Maungdaw border trade stations, were valued at5.58 million US dollars, while imports werevalued at 0.12 million US dollars from October to December 2021.

As of now, the exchange rate between Myanmar Kyat andBangladeshi Taka is 1 Bangladeshi Takaequal to 25 (or 26) Myanmar Kyats.