The Lao central bank strives to stabilise kip (LAK) (Photo: theculturetrip.com) Vientiane (VNA) – The Bank of the Lao PDR (BOL) has issued a decision on foreign exchange ratesetting to guide commercial banks in foreign currency trading.
The move allows commercial banks to have a more flexiblemargin in buying and selling foreign currencies, thereby stabilising the value of the local currency, the kip (LAK).
Specifically, commercial banks are allowed to set theexchange rate each day based on the reference rate set by the BOL.
Accordingly, the buying and selling rates of the LAK/USDof commercial banks must not differ by more than /-4.5% compared to thereference rate of the BOL.
The new decision does not limit the amplitude of theexchange rate between the LAK and the EUR , THB, CNY and other currencies, allowing forpossible deviations from the BOL reference rate.
However, in all exchange rates, the gap between thebuying and selling rates should not exceed 1%. Commercial banks are required toreport the value of their foreign exchange transactions to the BOL on a dailybasis, with separate reports for each currency.
In 2023, the Lao government has committed to furthertighten the exchange rate based on a market-oriented mechanism but under statemanagement./.
