BOL To Take Urgent Action On Differences In Exchange Rates

Source: Vientiane Times

The Bank of the Lao PDR (BOL) is now working to tackle several unresolved issues related to financial matters, including differences between the exchange rates in the market and banks.

BOL’s Deputy Governor, Ms Vatthana Dalaloy, speaking on behalf of the central bank at the 13th Lao Business Forum held in Vientiane on Wednesday, told members of the private sector that BOL is fully aware of these problems.

“These will be taken into the national agenda and prepared for the National Assembly to approve,” she said.

She explained the value of the kip has weakened against foreign currencies due to a number of factors, including the limit on production background, the trade deficit, and the strategy for foreign currency management.

“It is also related to exports and imports, direct investment by domestic and foreign investors, and other related issues,” she said.

Ms Vatthana noted that if these unresolved issues are not properly tackled, the value of the kip will continue to weaken in both the mid-term and the long-term.

“BOL will work in collaboration with the private sector to address both current and future problems by improving the law on management of foreign currency and other relevant regulations,” Ms Vatthana said.

She called on the private sector to work along with the central bank to implement various revised laws related to the management of foreign currency.

The half-day forum was a platform to review the progress of the dialogue process since the 12th Lao Business Forum, and demonstrated broad support for structured dialogue through the forum for identifying and resolving key issues affecting the private sector.

In addition, private sector speakers complimented the government on its concerted effort to roll out effective Covid-19 containment and mitigation measures, and immediate measures to protect vulnerable workers and firms from the worst effects of the sudden drop in economic activity.

These measures include tax exemptions and deferrals, provision of low-interest loans, and unemployment benefits through social security programmes.

The forum agreed on a concrete plan of action to continue dialogue and seek appropriate solutions to the remaining 32 issues over the next 12 months.

Since the recent forum, the private sector and government agencies have prioritised 40 specific issues in the areas of business entry, trade facilitation, access to financial services, enforcement of laws and regulations, and the promotion of sustainable tourism and agribusiness.

At the same meeting, the government made a commitment to work with the private sector to support policies and mobilise facilitations to improve the business environment in order to achieve the goals of socio-economic development.