Laos bans residents from holding foreign currency
The central bank of Laos has plans to ban the country’s residents from holding foreign currencies amid spiraling inflation and the rapid depreciation of the local currency, the kip.
The Laotian Times reported that the central bank’s governor, Sonexay Sitphaxay, said that there were several measures scheduled to address foreign exchange problems.
Apart from banning possession of foreign currencies for residents this would also include the issuance of special savings bonds with high interest rates starting in July.
The governor noted that the central bank would work “closely” with the Ministry of Public Security to “suppress” any agencies or individuals involved in any currency exchange activities that might affect the country’s financial stability.
The central bank would also work with relevant sectors and departments to improve mechanisms for the management and provision of foreign currencies related to the import of commodities necessary for people’s livelihoods, Sitphaxay said.
High-interest savings bonds issued
The planned bonds will have a total value of five trillion kip ($332.6 million) and would be sold to individuals and legal entities residing in Laos, except commercial banks and depository financial institutions. The first tranche of the bonds will have a six-month maturity and a one-time non-transferable interest payment rate of 20 per cent per year.
Laos’ inflation rate reached 12.8 per cent in May, the highest point in 15 years and a 11.3-per cent increase over the same month last year. The kip has depreciated 30 per cent against the US dollar over the year up to April 2022, reflecting the country’s considerable external liquidity constraints.
The central bank of Laos has plans to ban the country’s residents from holding foreign currencies amid spiraling inflation and the rapid depreciation of the local currency, the kip. The Laotian Times reported that the central bank’s governor, Sonexay Sitphaxay, said that there were several measures scheduled to address foreign exchange problems. Apart from banning possession of foreign currencies for residents this would also include the issuance of special savings bonds with high interest rates starting in July. The governor noted that the central bank would work “closely” with the Ministry of Public Security to "suppress" any agencies or individuals...
The central bank of Laos has plans to ban the country’s residents from holding foreign currencies amid spiraling inflation and the rapid depreciation of the local currency, the kip.
The Laotian Times reported that the central bank’s governor, Sonexay Sitphaxay, said that there were several measures scheduled to address foreign exchange problems.
Apart from banning possession of foreign currencies for residents this would also include the issuance of special savings bonds with high interest rates starting in July.
The governor noted that the central bank would work “closely” with the Ministry of Public Security to “suppress” any agencies or individuals involved in any currency exchange activities that might affect the country’s financial stability.
The central bank would also work with relevant sectors and departments to improve mechanisms for the management and provision of foreign currencies related to the import of commodities necessary for people’s livelihoods, Sitphaxay said.
High-interest savings bonds issued
The planned bonds will have a total value of five trillion kip ($332.6 million) and would be sold to individuals and legal entities residing in Laos, except commercial banks and depository financial institutions. The first tranche of the bonds will have a six-month maturity and a one-time non-transferable interest payment rate of 20 per cent per year.
Laos’ inflation rate reached 12.8 per cent in May, the highest point in 15 years and a 11.3-per cent increase over the same month last year. The kip has depreciated 30 per cent against the US dollar over the year up to April 2022, reflecting the country’s considerable external liquidity constraints.
