Bank shake-up seen as bid by junta to control Myanmar’s financial sector: experts

A junta shake-up of Myanmar’s Central Bank leadership announced last week is part of a bid by the military regime to assume control of the country’s financial sector and extend its grip on power, experts warned Wednesday.

On Aug. 19, the junta issued a statement saying that it had replaced Central Bank Chairman Than Nyein and Vice Chairman Win Thaw with Central Bank Vice Chairman Than Than Swe and Director General of the junta Defense Ministry’s Accounts Office Maj. Gen. Zaw Myint Naing, respectively.

The announcement of the reshuffle comes two months after the junta appointed six lieutenant colonels to the Central Bank as deputy directors and ensures that all key positions at the financial institution are held by either military generals or those close to the regime.

A Myanmar-based economist, who did not want to be identified for security reasons, told RFA Burmese that the shake-up is part of a bid by the junta to gain control of the country's economy.

“[Than Than Swe] who became the chairman is quite strong, but as far as we know, there aren’t many people who will support her,” the economist said.

Than Than Swe, widely seen as pro-military, was the target of an unsuccessful assassination attempt in April, when unknown assailants shot her at her apartment complex in Yangon amid a public outcry over a new Central Bank directive ordering the sale of all U.S. dollars and other foreign currency at a fixed rate to licensed banks.

The 55-year-old was sworn in as deputy governor of the Central Bank after the military seized power from Myanmar’s democratically elected National League for Democracy (NLD) government in a Feb. 1, 2021, coup.

Believed to be the most senior junta official to be shot since the takeover, she is known to have led efforts to reduce the cash flow in the banking and financial system under the NLD, according to a report by The Irrawaddy online news agency.

An official with a private domestic bank in Myanmar told RFA on condition of anonymity that the replacements announced last week and appointment of six military officers to deputy director positions in June indicate that the junta is working to assume total control of the country’s Central Bank.

“It’s a matter of placing your own people [in key positions] to extend your power … because the flow of money is the most important thing in the world, regardless of whether it’s for good or bad,” the official said.

“They must assume that they will learn more about the accounts of the people, including local businessmen, by controlling a key body such as the Central Bank.”

The bank official said it is too early to say whether the appointments will have a beneficial impact on Myanmar’s economy, which has been devastated by political instability in the wake of the coup, prompting businesses to fold and foreign investors to flee.

Poorly planned policies

Public trust in Myanmar’s banks has eroded since the military takeover, as indicated by a growing number of savings withdrawals, while global trade has been reduced to a trickle amid various Central Bank restrictions placed on the U.S. dollar, sources told RFA.

A Mandalay-based trader, who also declined to be named, told RFA that importing and exporting goods had become nearly impossible due to the Central Bank’s constant shifting of policies.

“I’m so tired of making adjustments in accordance with the bank’s directives. It's not easy. I follow their instructions, but it is extremely inconvenient,” he said.

“When you have to operate your businesses according to endlessly changing monetary policies, you will suffer losses due to fluctuations in rates, and this is what has happened to us.”

The attack on Than Than Swe came days after an unpopular April 3 Central Bank directive ordering all foreign currency, including the U.S. dollar, to be resold within one day of entering the country to licensed banks at a fixed rate of 1,850 kyats to the dollar. Earlier this month, the rate was raised to 2,100 kyats, while the current market price is nearly 3,000 kyats.

According to government records, there have been a total of 2,525 employees — including 494 officers — at the Central Bank since 2012, working in seven key departments. People with knowledge of bank operations say many of the employees are former military officials who were transferred to their current positions.

On the day of last year’s coup, the military removed NLD-appointee Kyaw Kyaw Maung from his position as Central Bank chairman and arrested bank Vice Chairman Bobo Nge – also an NLD supporter.

In their places, the junta reappointed Chairman Than Nyein, who had served in the role under successive junta regimes, and promoted Than Than Swe and Win Thaw, then directors-general at the bank, to vice chairman positions.

The changes announced last week follow nearly 17 months of policies widely seen as poorly planned and damaging to the country’s economy.

Translated by Khin Maung Nyane. Written in English by Joshua Lipes.