Bank of the Lao PDR (BoL) is set to tackle the difference in currency exchange rates between banks and money-changing outlets through the registration of exchange units, bringing them under the authority of commercial banks.
The Lao Ministry of Finance, on behalf of the government, has asked the National Assembly (NA) to consider changes to the Law on Value-Added Tax (VAT) to help address the country’s financial difficulties.
The gap between the official and parallel market exchange rates has widened in recent months, driven by a mismatch in supply and demand, resulting in pressure on importers and inflation.
An elevated fiscal deficit will result in growing public debt, which will ramp up pressure on Laos’ debt servicing capacity amid the Covid-19 crisis.
The Bank of the Lao PDR has come up with a new administrative rule designed to administer currency exchange businesses amid the appreciation of international currencies against the Lao kip.