KBZ Bank and Yoma Bank have entered into the first repo transaction in Myanmar. An overnight test trade of K1 billion (USD$720.3k) and weekly test trade of K500 million between the two banks on July 24 was successful. Settlement was conducted through CBM-NET, the Central Bank of Myanmar’s new clearing and settlement system.
The move is significant for Myanmar, where liquidity has been insufficient and many businesses, particularly in construction and real estate are cash strapped. Currently, only local and foreign banks are permitted to engage in interbank activity: Yoma Bank, KBZ Bank, AYA Bank and CB Bank, as well as foreign bank ANZ. However, interbank transactions have not been extended to other financial institutions such as insurance and microfinance companies.