Foreign Exchange Certificates (FEC) are no longer needed in lieu of US dollars following a decision debated in the Pyidaungsu Hluttaw and signed by President U Thein Sein on March 20.
“Although FEC is abolished, the certificates can still be exchanged for USD or handed over in banks. Hluttaw representatives approved the decision because FEC is no longer needed by private busineses, as official exchange currency is now widely available in Myanmar,” said U Sai Thiha Kyaw, a member of the parliament’s Public Accounts Committee.
He added that the move to abolish FEC was advised by the International Monetary Fund.
A spokesperson for the Foreign Exchange Management Department (FEMD), which operated under the Myanmar Central Bank, said that banks will be able to replace FEC with either USD or kyat; or, later withdraw them as kyat.
“The value of FEC is the same as USD, so we will ensure that FEC holders do not lose their money,” the spokesperson told The Myanmar Times on March 20.
The bank announced it would abolish the use of FEC in August 2012, slated for March 2013. FEC was originally introduced by the bank to Myanmar in 1993, meant for foreign travellers to use while inside the country.
“The government agreed to abolish it this month because April starts the new year for the budget. We have been preparing for the change since we announced it [in August].
We tried to keep and collect any FEC that entered the bank, and changed it to kyat or USD for customers,” the spokesperson said.
As a result, the FEC value a dollar jumped K5 to 10 higher in January as the certificates demand overreached supply; the FEC stabilised in February.
Following the hluttaw’s decision, the FEC value stands at K875-880 while the USD is K880-88 on the black market as of March 21. The exchange rate for FEC and USD at official money changers and banks stands at K881-887 as of March 22.