The Central Bank of Myanmar (CBM) has banned the use of foreign currency for local payments to stabilise the foreign exchange rate in the country, reported Xinhua news agency.

People wait to withdraw money from an ATM outside a branch of Myawaddy Bank in Yangon on February 23. (Photo: AFP/VNA)

The CBM asked government agencies to pay with only Myanmar kyat, saying the use of foreign currencies for domestic payments could lead to higher demand for dollars and cause exchange rate instability.

The move came after it found out that some government agencies and organisations were using foreign currencies for local payments.

They were using and accepting foreign currencies in some of their activities including renting lands, capital investments for insurance business and income from joint ventures, said Win Thaw, CBM deputy governor.

The notification has already been sent to all ministries, region and state governments and municipal committees of Nay Pyi Taw, Yangon and Mandalay cities, asking them to use only kyat for the purchase and sales of goods and services and payments in the country, the central bank said.

Source: VNA