VIENTIANE, June 11 (Xinhua) -- The Lao central bank, the Bank of the Lao PDR (BOL), will set caps on foreign currency deposit and lending rates to encourage the use of the Lao local currency kip and support economic stability.
The central bank plans to coordinate closely with the government to tighten monetary policy and align money supply with current economic conditions, Lao National Radio reported on Wednesday.
Key measures include limiting interest rates on foreign currency deposits and loans, managing exchange rates through market mechanisms, and cracking down on informal currency exchanges. The bank also aims to enhance transparency and liquidity through improvements to the Lao Foreign Exchange System.
Exporters and investors will be urged to repatriate earnings and conduct foreign exchange transactions through official banking channels. Meanwhile, the government will revise tax policies to reduce foreign exchange burdens on exporters and foreign direct investment enterprises, offering incentives for kip-based transactions.
These efforts aim to address ongoing pressure on the kip, fueled by high inflation and a persistent shortage of foreign currency. By promoting the use of kip and tightening foreign exchange regulations, the BOL seeks to restore monetary stability. ■
