Laos tightens monetary policy to ease inflation

August 30, 2024 | 09:11

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The Bank of the Lao PDR is set to further increase interest rate on Lao kip deposits from 10 per cent to 10.5 pc per year to alleviate inflationary pressures currently affecting the economy, reported the Vientiane Times.

Laos tightens monetary policy to ease inflation, Illustrative image (Photo:laotiantimes.com)

Hanoi – The Bank of the Lao PDR is set to further increase interest rate on Lao kip deposits from 10 per cent to 10.5 per cent per year to alleviate inflationary pressures currently affecting the economy, reported the Vientiane Times.

The interest rate on foreign currency deposits will also rise from 10 per cent to 11 per cent.

The central bank recently approved a resolution to raise the basic interest rate for kip on a 7-day term, from 8.5 per cent to 10 per cent per annum.

It will continue following the policy of maintaining a centralised foreign exchange market under state management, while also managing foreign currency and developing a payment system that connects domestic and international banks to promote the use of kip.

Inflation in Laos continued to rise in July 2024, reaching 26.1 per cent month-on-month, amid a weakening kip and rising global fuel prices.

Laos to establish bullion bank

The Government of Laos, represented by the Ministry of Finance, has signed a shareholders’ agreement with PTL Holding Co., Ltd. to establish the Lao Bullion Bank as a reserve fund for the nation’s economic and financial system.

Vietnamese, Lao central banks discuss cooperation in using local currencies in bilateral trade

The State Bank of Vietnam and the Bank of Laos have jointly organised a conference to share experience in promoting the use of respective domestic currencies in bilateral trade and investment cooperation activities to prevent external risks.

By VNA

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