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In a significant policy shift, the US last week announced the partial lifting of sanctions on Myanmar’s junta. The new measures allow transactions involving Myanmar’s central bank and certain state-owned enterprises, including Myanma Oil and Gas Enterprise. The move came shortly after news that Myanmar’s top general had written to President Donald Trump, expressing optimism for improved relations.

US officials clarified there was no connection between the sanctions decision and the letter. Nevertheless, the timing and scope of the changes merit close examination, especially considering their impact on the ongoing civil war, the Rohingya crisis and broader regional dynamics.

Myanmar remains locked in a violent civil conflict that erupted following the 2021 military coup. Resistance movements — including the national unity government and various ethnic armed groups — have gained significant momentum across the country. The military regime has responded with airstrikes, mass arrests and the restriction of humanitarian access, particularly in contested areas.

Against this backdrop, sanctions targeting Myanmar’s central bank and the Myanma Oil and Gas Enterprise had served as a key element of international pressure, restricting the regime’s access to foreign currency and limiting its ability to finance military operations. The easing of these restrictions comes at a moment when the junta is under increasing pressure on the battlefield and in international forums.

Supporters of the policy change point to the need for humanitarian flexibility and concerns over unintended consequences in the region’s financial sector. Several banks in Southeast Asia had reportedly begun derisking operations involving Myanmar, making it harder for aid organizations and third-party financial institutions to operate. The updated policy aims to mitigate those effects while continuing to target individuals and entities directly involved in abuses.

The policy shift has important consequences for the Rohingya, who remain some of the most vulnerable people in Myanmar. An estimated 600,000 Rohingya still live in Rakhine State under conditions of extreme repression, while nearly 1 million remain in refugee camps in Bangladesh. Humanitarian agencies continue to report that access to food, medicine and aid in northern Rakhine is severely restricted.

A recent report by the Burmese Rohingya Organisation UK detailed the use of starvation as a weapon of war in Rohingya areas, with dozens already reported dead from hunger and lack of medical care. Lifting some restrictions on financial transactions with state-owned enterprises does not directly address this crisis, but observers hope it could open new diplomatic channels and enable greater international engagement on humanitarian access.

It also comes at a time when international aid to the Rohingya refugee camps in Bangladesh is declining sharply. With funding cuts and a deteriorating situation on the ground, any policy that could improve coordination or unlock new avenues of support is being closely watched by humanitarian actors.

Any policy that could improve coordination or unlock new avenues of support is being closely watched by humanitarian actors.

Dr. Azeem Ibrahim

The easing of sanctions may also reflect evolving geopolitical realities. Myanmar sits at a crucial crossroads between South Asia, Southeast Asia and China. For years, Beijing has deepened its influence in Myanmar through infrastructure projects and strategic partnerships. Any steps that reduce Myanmar’s economic dependence on China or open space for engagement with international actors may serve broader regional objectives.

In addition, restoring limited financial access for Myanmar’s central institutions could support nongovernmental and cross-border aid flows, allowing for greater humanitarian flexibility in areas not under junta control. A careful calibration of sanctions may be part of a broader strategy to preserve humanitarian space while maintaining pressure on the military leadership.

Neighboring countries such as Bangladesh, Thailand and India will be watching these developments closely. Bangladesh, in particular, is bearing the brunt of the regional fallout, hosting hundreds of thousands of Rohingya refugees for more than seven years. With international support decreasing and no immediate solution in sight, Dhaka has repeatedly called for renewed efforts to facilitate the voluntary, safe and dignified repatriation of the Rohingya to Myanmar.

If the policy shift from Washington signals a potential diplomatic opening, it could also reinvigorate discussions around the role of the Association of Southeast Asian Nations and other regional actors in supporting a political settlement. Malaysia and Indonesia have pushed for greater engagement on Myanmar within ASEAN, while other states have emphasized noninterference. A more flexible US posture could help bridge these differences and encourage coordinated regional approaches.

The US decision to lift certain sanctions on Myanmar represents a notable recalibration of policy. While the full consequences remain to be seen, the move creates space for potential humanitarian and diplomatic gains. The civil war continues to evolve and new approaches may be needed to address the complex realities on the ground.

Going forward, it will be important for Washington and its partners to maintain clear conditions and expectations regarding human rights, access to aid and political inclusion. By carefully managing this new phase of engagement, the international community can continue to support the people of Myanmar — including the Rohingya — in their pursuit of peace, dignity and justice.

• Dr. Azeem Ibrahim is the director of special initiatives at the Newlines Institute for Strategy and Policy in Washington, DC. X: @AzeemIbrahim