24.03.2025 (12:01 PM)

The Central Bank of Myanmar has increased the interest rate on the average excess reserves that banks must maintain in Myanmar Kyat (CAB) from 3.8 percent to 6 percent, the Central Bank announced on March 21, 2025.

The Central Bank of Myanmar has issued a directive (4/2024) to increase the interest rate on the average excess reserves that banks must maintain in Myanmar Kyat (CAB) to 3.8 percent in order to further facilitate the liquidity of banks and to increase the banks’ interest income.

The Central Bank of Myanmar has issued a directive (4/2024) to increase the interest rate on the average excess reserves that banks must maintain in Myanmar Kyat (CAB) to 3.8 percent in order to indirectly reduce the relatively high level of circulating funds outside the Central Bank. In order to support the correctness of the interest rate structure and to contribute to the stability of the banking sector by generating more interest income for banks, the interest rate paid on the average excess reserves in excess of the minimum reserve requirement (CAB) to be maintained by banks in Myanmar Kyat (MYK) has been adjusted in accordance with the decision of the Monetary Policy Committee (MPC) meeting (1/2025) held on February 28, 2025.

In paying interest on the average excess reserves, interest will be paid only to banks with an average excess reserve of at least seven billion kyats and above, and the maximum excess reserve will be allowed up to 50 billion kyats, and the interest rate on the average excess reserves has been increased to 6 percent.

The Central Bank of Myanmar will review the minimum and maximum interest rate on the reserve funds and the interest rate on the average reserve funds from time to time and adjust (increase/decrease) to meet market needs.

The interest will be calculated based on the average reserve funds on the last day of the minimum reserve requirement maintenance period and will be automatically credited to the relevant bank’s account at the Central Bank of Myanmar on the last day of the maintenance period.

The interest on average net surplus will be implemented from the maintenance period from March 26 to April 22, 2025. The interest on average net surplus will be applied uniformly to state-owned banks, private banks, and foreign bank subsidiaries that are permitted to provide retail banking services in Myanmar kyat.