The Central Bank of Laos plans to ban the country’s residents from holding foreign currencies amid rising inflation and a rapid devaluation of the local currency, the kip. In addition to banning residents from holding foreign exchange, Laos’ central bank governor Sonexay Sitphaxay also plans to issue high-interest special savings bonds starting in July to solve the foreign exchange problem, according to the Lao Times. The governor noted that the central bank will work “closely” with the Ministry of Public Security to crack down on anyone involved in any…
Central Bank of Laos plans to ban the country’s residents from holding foreign currency spiral inflation And the rapid devaluation of the local currency, the kip.
This lao times In addition to banning residents from holding foreign currencies, central bank governor Sonexay Sitphaxay said several measures were planned to address foreign exchange issues, as well as the issuance of high-interest special savings bonds from July, the report said.
The governor noted that the central bank will work “closely” with the Ministry of Public Security to crack down on any institution or individual participating in any illegal currency exchange activities that could affect the country’s financial stability.
The Central Bank will also work with relevant departments and departments to improve the foreign exchange management and provision mechanism related to the import of commodities necessary for people’s livelihood.
Issuance of high-yield savings bonds
The planned bonds, with a total value of 5 trillion kip, will be sold to individuals and legal entities residing in Laos, excluding commercial banks and depository financial institutions. The first tranche of bonds has a maturity of six months and a one-time non-transferable interest payment rate of 20% per annum.
Inflation in Laos hit 12.8% in May, the highest in 15 years, up 11.3% from the same month last year. The kip depreciated 30% against the dollar in the year to April 2022, reflecting the country’s considerable external liquidity constraints.
