VIENTIANE, Oct. 20 (Xinhua) -- Money exchange units in Laos that represent commercial banks are now prohibited from selling foreign currency, according to Lao central Bank.
According to an updated information from the Bank of the Lao PDR (BOL) website, the Lao central bank issued a notice on exchange rate determination, aiming to stabilize the Lao kip. The notice became effective on Oct. 11.
The ban supports the government's efforts to give commercial banks a greater role in the purchase and sale of foreign currencies, while limiting the role of money exchange units in currency trading.
Under the new policy, money changers will be allowed to buy foreign currencies from customers but are forbidden to sell currencies other than kip, the local currency.
This is the latest step taken by the Lao central bank to regulate foreign currencies amid the continuing depreciation of the kip, which has driven up inflation and severely affected the economy.
According to the BOL, banks and money changers must report their exchange rates in the media and to the central bank using platforms such as their own website.
Commercial banks are obliged to report the performance of their exchange rates and those of their representative money-changing units to the central bank on each official working day. The report must include the overall value of the currency traded and the value of each currency traded.
In June 2022, the central bank placed restrictions on currency exchange units, allowing them to change money only for individuals and tourists, up to a maximum of 15 million kip per person per day.
Money changers are banned from trading in foreign currencies with organizations and companies. Currently, only commercial banks are authorized to buy and sell foreign currencies with importers, exporters, investors and other legal entities.
Inflation in Laos hit 22-year high at 34 percent in September 2022, according to the Lao Statistics Bureau website.
The 22-year high price rise was driven by the surge in the price of food, medicines, fuel and other consumer goods.