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Central Bank to Sell 3 Trillion KIP Worth of Bonds

Source: Vientiane Times

The Bank of the Lao PDR (BOL) will sell its third tranche of BOL bonds worth 3 trillion kip from September 6-8 as part of efforts to stabilize the value of the kip.

The sale of the bonds by the central bank is designed to support the government’s monetary policy and enable members of the public to invest in securities and earn a secure and sizeable profit.

The move is part of the government’s National Agenda to address the country’s economic and financial difficulties amid rampant inflation and continuing depreciation of the kip.

According to a notice issued by the BOL on Tuesday, the bonds have a six-month maturity and a one-time non-transferable interest payment of 15 percent per year.

Sale of the bonds will be channeled through seven commercial banks – BCEL, Lao Development Bank (LDB), Agriculture Promotion Bank (APB), Lao-Viet Joint Venture Bank, Joint Development Bank (JDB), BIC, and ICBC.

Purchases will be limited to a maximum value of 1 billion kip for individuals and legal entities, and the par value of the bonds begins at 100,000 kip per unit, according to the notice.

Individuals and legal entities that have resided or been operational in Laos for at least one year are eligible to buy the bonds, except for commercial banks and non-bank financial institutions.

The bonds will be issued electronically, and bondholders will be given a physical BOL Bond Certificate issued by the bank where the purchase is made. Interested purchasers can visit any of the commercial banks appointed by BOL to buy the bonds.

The Bank of the Lao PDR has issued bonds several times since June last year, worth a combined total of 12 trillion kip.

In June 2022, the central bank issued savings bonds worth 5 trillion kip to individuals and legal entities in Laos, aiming to stabilize the macroeconomy amid the recent surge in inflation, exchange rate volatility, and high growth of the money supply.

In January this year, the central bank issued bonds worth 1 trillion kip for a period of six months with an annual interest of 20 percent through seven commercial banks.

In February, BOL issued another 1 trillion bond denominated in kip, but with an interest rate of 15 percent for six-month maturity down from 20 percent. Bonds went on sale at seven commercial banks.

In May, the central bank issued a 2 trillion bond denominated in kip with an interest rate of 15 percent for a period of six months through seven commercial banks.