Laos Strives to Maintain Monetary Stability

Source: Xinhua Net

The Lao government has taken measures to maintain monetary stability, such as increasing interest rate, ratio of compulsory deposits and issuance of bonds, Lao News Agency reported on Thursday.

The government has implemented an exchange rate policy in a more flexible direction and allocated foreign currency resources for fuel imports, and created a department at the central bank to manage foreign currency.

Additionally, the Lao government has tried to establish a representative office of the central bank in two special economic zones, and revised the law on foreign currency management.

During two and a half years, the amount of money in circulation grew by an average of 27.58 percent per year, the average inflation rate increased at the level of 18.24 percent, the exchange rate of the Lao currency kip against the U.S. dollar weakened by an average of 18.32 percent per year, which fluctuates beyond the set limit.

Laos recorded an inflation rate of 25.69 percent in September, a slight decrease from 25.88 percent in August, according to official data.

While inflation has eased since early 2023 in the Southeast Asian country, Laos still has one of the highest inflation rates in the region, causing real household incomes to fall for many people, weakening consumption and investment.

In September, the hike in consumer prices was mainly driven by the hotel and restaurant category, which stood at 34.4 percent year-on-year.