Myanmar is set to be placed on a watchlist by a global finance watchdog this week, amid concerns of money-laundering by transnational drug traffickers and weak regulation of its financial system, Reuters reported.

A decision to put Myanmar on the "grey list" by the Paris-based Financial Action Task Force (FATF) would mean the inter-governmental body had found "strategic deficiencies" in the country's ability to counter money-laundering and terrorism financing.

While being on the list does not carry any sanctions, it could curtail the growth of financial, investment and trade flows to and from the Southeast Asian nation, a high-level official, speaking on condition of anonymity, told Reuters.