Myanmar wants Rupee-Kyat trade arrangement by June-end

Kolkata: Myanmar Commerce Minister U Aung Naing Oo on Monday expressed hope that a Rupee-Kyat trade arrangement between the two nations is finalised by June-end.

Oo said trade volume between the two countries will double once the arrangement being worked out as Myanmar which has been hit by US sanctions is unable to earn sufficient foreign exchange to import goods from its trade partners.

"We are suffering from US sanctions since 2021 and it is becoming difficult to settle payment transactions with other countries in dollars", he said at an event organised by EEPC India here.

Under the special arrangement, Myanmar will accept Rupee payments for all its exports to India and use that rupee hoard to import from here.

To facilitate this, RBI has appointed Punjab National Bank (PNB) to open a special Vostro account for foreign trade with Myanmar. PNB in turn has approached two banks in Myanmar where these accounts will be opened.

The minister said "negotiations between PNB and the central bank of Myanmar is going on and is expected to be completed by this month. Once this arrangement becomes operational, trade volume between the two countries will double".

Oo said India is the eleventh largest investor in Myanmar with $ 775.11 million worth of investments.

He said India also was one of the main trading partners of Myanmar in the previous fiscal year. India had exported USD 820 million worth of goods to its eastern neighbor and imported goods worth USD 540 million.

Top exports from Myanmar to India include metal ore, natural rubber, plywood, fish, lentils and garments.

Myanmar’s major imports from India include pharmaceuticals, petroleum products, chemicals, machinery, coffee and tea. India accounts for five per cent of Myanmar's international trade, he said.

Myanmar has already put in place similar trading arrangements with China and Thailand.

"We are going for this special arrangement with neighbouring countries to reduce our dependence on dollars,”Oo added.

The minister also said that Myanmar Central Bank and the RBI have mutually agreed in principle on a Rupee-Kyat payment system and standard operating procedures (SOP) to support this has been negotiated in lines with the foreign exchange policies of both the countries.