Before 2011 the only real way to change money in Myanmar was on the black market. Black market moneychangers could be found at Bogyoke Market, in private houses, and even on the street. While changing money on the black market was officially illegal, it was a practice that was widely tolerated by government officials. But this tolerance had limits, and black market currency traders were frequently arrested at Bogyoke Market as a display of authority by the government.
The situation has rapidly changed with the floating of the Myanmar Kyat and the institution of an official exchange rate. Each day the exchange rate is set by the Central Bank which publishes buy/ask rates daily. This rate is available online at the Central Bank’s website (www.cbm.gov.mm), and licensed exchange centers and moneychangers base their own rates on this Central Bank rate. There is usually a 5-10 Kyat discrepancy between the Central Bank rate and the rates available to consumers. The exchange rate is updated at 12 noon each day and there can often be significant fluctuations in the rate from day-to-day. People wishing to buy currency before 12 noon will be offered the previous day’s rate. Although black market moneychangers do still exist, it is becoming more common for people to use official moneychangers. This is not only because it is legal to do so, but also because moneychangers can offer a paper trail of exactly how much currency was exchanged. For foreign companies looking to exchange money this is vital, because it ensures that you have official records of your transactions.
By far the most favored currency for foreign exchange in Myanmar is the US Dollar. As in other countries, higher denominations fetch higher prices on the currency exchange market. If you’re looking to change a lot of foreign currency, you should be sure to change $100 bills as these will get higher rates. There’s a caveat to changing money in Myanmar that all foreign investors should be aware of – every $100 bill you exchange will be thoroughly scrutinized for tears, markings, folds, and any other type of blemish. If your bill is old and wrinkled, it will be flat out rejected. This may seem very strange for foreign investors because, after all, the currency is still legal tender. However this does not matter in Myanmar, so you must bring only crisp, clean, new bills into the country. Investors who fail to heed this advice will be in for a rude awakening – any note marked with a small blemish will instantly lose its value on the currency exchange market. Currency traders are known to knock the exchange rate down 100 Kyat for each blemish found on a particular note. This can make a significant difference if you are exchanging a lot of currency.
Because there are no large denominations of Myanmar Kyat it means that you will need to do a lot of counting when exchanging large amounts of dollars. We suggest that you insist on counting the money that you receive either by hand or with a bill counter. This is because currency traders often make mistakes (either knowingly or unknowingly) and you may be shortchanged if you fail to count the bills given to you. If you are changing Kyat into dollars make sure that you insist on receiving perfectly clean crisp bills. If you accept worn out or dirty notes you will have been the victim of a savvier currency trader who knows that it is hard to re-exchange these bills.