Two private banks, Ayeyarwady Bank (AYA Bank) in Myanmar and Thailand’s Siam Commercial Bank (SCB) have signed a memorandum of understanding (MOU) to collaborate in the development of cross border payments and fund transfer services between the two countries.This cements an October 2019 agreement between the Central Bank of Myanmar and the Bank of Thailand to promote the official use of the Myanmar kyat and Thai baht when trading at the border.

The Central Banks also inked a second MOU to promote financial innovation and services for payments through collaboration between the two countries.Even though trading at the Thai-Myanmar border is already conducted in kyat and baht, payments that are processed through the banks are conducted in US dollars, resulting in leakages through foreign exchange losses.Through this MOU, they can bring more of the payments through the formal channel and make the process more convenient.

This will also encourage remittances through proper channels. Even though there large numbers of Myanmar migrant workers in Thailand, international money transfers take place via the unofficial Hundi system and there is no guarantee the funds will be safe.Trade volumes at the Thai-Myanmar border, including Tachileik, Myawaddy, Kawthoung, Myeik, Htee Khee and Maw Taung during fiscal 2018-19 amounted to US$3.8 billion, according to government data.

Source: Myanmar Times

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