“Seven out of 13 banks have been given approval to provide export financing and its related services by the Central Bank. The others who have applied are being reviewed,” U Soe Thein said.

The central bank will not restrict the rates and the volume of export financing provided by foreign banks. The loans will be disbursed according to the terms of individual banks, said U Soe Thein.

The move comes amid calls by the business community for more equal treatment of foreign banks compared to their local counterparts.

As the CBM will not be lowering prevailing interest rates until it is satisfied inflation has stabilised, businesses believe a more level-playing field between local and foreign banks will give them more options to borrow money at more competitive rates.

As more foreign banks begin providing the service, competition will rise within the market and local banks will have to compete with foreign banks and lower their rates, said U Hnin Oo, vice chair of Myanmar Five Star Fish Processing.

Businesses have so far hailed the move as positive, saying it is a step forward in the nation’s attempt to become a market-based economy.

During an exclusive interview with The Myanmar Times last month, U Soe Thein said the CBM intends over the next 5-10 years to liberalise the financial sector and allow banks to set their own interest rates.

“It is a good sign that foreign banks have been approved to provide more services ass this will result in more choices becoming open to traders,” U Hnin Oo noted.

In Myanmar, foreign banks are restricted from accepting deposits as well as providing loans in the local currency.

Source: https://www.mmtimes.com/news/seven-foreign-banks-approved-do-export-financing.html