It also includes provisions governing the relations of the Central Bank with the Government, measures and procedures to formulate and implement monetary policy, implementation of exchange rate policy and control of foreign exchange transactions and the powers of the board of directors to ensure the effective performance of the Central Bank. The purpose of exchange management is to conserve the available foreign exchange reserves of the country. Exchange management is administered by the Controller of Foreign, Exchange of the Exchange Management Department of the Central Bank of Myanmar and the Exchange Management Board in accordance with the instructions from the Ministry of Finance and Revenue. Both exportation and importation of kyats are prohibited. The Kyat is not negotiable abroad.
All external payments are subject to authorisation.
All export proceeds and invisible receipts must be declared to the Myanma Foreign Trade Bank at present. Myanmar applies margins of 2 per cent in respect of spot exchange transactions, based on the fixed Kyat - SDR rate. The buying and selling rates of the Kyat for the Deutsche mark, the French franc, the Japanese yen, the pound sterling, the Swiss franc, and the US dollar quoted by the Myanma Foreign Trade Bank are determined on the basis of the daily calculations of the value of these currencies against the S D R. Buying and selling rates for other currencies such as Singapore dollar, Italian lira, Hong Kong dollar, Netherlands guilder etc., are determined on the basis of appropriate cross rates in different money markets of various geographical regions. There are no taxes or subsidies on purchases or sales of foreign exchange. There are no arrangements for forward cover against exchange rate risk operating in the official or the commercial banking sector.