Kip depreciation affects Lao economy

The Lao kip (Photo: asiaasset.com)

Vientiane (VNA) - The value of the Lao currency, the kip, dropped by 37.4% againstthe US dollar and 32.9% against the Thai baht in the official market fromJanuary to August, according to an updated report of the Asian Development Bank(ADB).

The continuing depreciation of the kip is linked to asupply-demand mismatch of foreign currencies, putting pressure on importers andincreasing inflation.

The currency devaluation also has negative impacts on theLao economy, driving up the price of products and creating more hardship forthe poor.

According to the report, the year-on-year inflation rate inAugust was at a 22-year high of 30%. The rate averaged 15.5% in the first eightmonths of 2022.

Administered prices for fuel were increased 13 times fromJanuary to September, resulting in a 90.3% rise in diesel prices and a 62.3%increase in gasoline prices./.

VNA