Border trade between Myanmar and India has come to an abrupt halt after authorities called an end to a popular barter system, according to a local association.
On December 1, India ended long-standing rules allowing border trade to be settled by an exchange of goods. Since then, business has almost stopped, said U Khin Mg Tin, joint secretary of the Border Trade Chambers of Commerce Association in Kalay.
India’s central bank said last month that barter trade is no longer necessary, as an adequate banking system is now in place on both sides of the border. However, banks on the Indian side are not yet issuing letters of credit said U Khin Mg Tin.
Traders don’t know when this will start, he said. “There are weaknesses in the banking systems in both countries. I think the telegraph transfer system would work in Myanmar, but they don’t have this in India,” he said.
Trade can be settled in any “permitted currency”, in addition to the Asian Clearing Union mechanism, the Reserve Bank of India said in a November circular. Under the ACU, traders can settle border transactions through their central banks. (Courtesy of mmtimes.com)
No comments:
Post a Comment