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Laos Steps Up Efforts to Boost Foreign Currency Reserves

Source: Xinhua News

The Lao central bank, the Bank of the Lao PDR, is taking more steps towards monetary stability, especially by ensuring that more of the foreign currency that enters Laos is handled through the banking system to boost foreign reserves.

The bank has set a target to ensure that at least 70 percent of export earnings enter the banking system and that foreign reserves are sufficient to guarantee five months of imports, Lao national TV reported on Tuesday.

To achieve the target, the Foreign Exchange Management Department of the Lao Central Bank has formulated new measures that involve more stringent oversight.

The department plans to revise existing legislation on the exchange rates involved when exporters deposit foreign currency in banks, the regulation of foreign currency earned by workers, revenue from tourism, and the opening of foreign currency accounts in Laos and other countries.

The central bank will regulate the flow of foreign currency for international trade by completing the opening and transfer of special deposit accounts for import-export companies in the first quarter of 2024.

The Foreign Exchange Management Department will be responsible for authorizing money transfers to foreign countries, especially for the payment of luxury goods and services by individuals and companies through commercial banks.

In addition, the Lao central bank will ensure that all foreign currency transactions take place legally and through bank accounts opened specifically for export and import purposes and investment accounts.