The Central Bank of Myanmar (CBM) announced on March 21 that it has increased the interest rate on average excess reserves that banks are required to maintain in Myanmar kyat accounts with the Central Bank (CAB). The new interest rate is now 6 percent, up from the previous rate of 3.8 percent for reserves that exceed the minimum reserve requirement.
The statement stated that interest on average excess reserves will only be paid to banks with an average excess reserve of at least 7 billion kyats and above, and the maximum excess reserve amount will be allowed up to 50 billion kyats. The Central Bank of Myanmar will periodically review both the minimum and maximum amounts of excess reserves, as well as the interest rate on average excess reserves, making adjustments as needed to align with market
The interest rate will be calculated based on the average excess reserve on the last day of the minimum reserve requirement maintenance period. It will be automatically added to the relevant bank’s account at the Central Bank of Myanmar on T+2 of the last day of the maintenance period. The interest rate on the average excess reserve will be applied from the maintenance period from March 26 to April 22. Furthermore, it has been announced that the interest rate on average excess reserves will be uniformly applied by state-owned banks, private banks, and foreign bank subsidiaries authorized to provide retail banking services in Myanmar kyat.
