Myanmar is planning to introduce a scheme to make letters of credit (L/Cs) available to importers of fuel and palm oil.
The scheme proposed by Myanmar Central Bank (MCB) is designed to solve the problem importers face obtaining foreign exchange.
Central bank support
Under the scheme, domestic banks will issue L/Cs for importers of fuel and edible oil.
The MCB will then sell foreign exchange needed for the imports to the offshore accounts of domestic banks to clear the overseas payments required for imports.
The importers will then pay the domestic L/C issuing bank in Myanmar’s local kyat currency.
Central bank officials hope the scheme will provide importers with protection against exchange rate volatility and curb inflation.
Categories: Trade Based Financial crimes News