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PM: Govt Mulls Curbs On Imports To Save Foreign Currency

Source: Vientiane Times

The government is considering placing limits on certain imported goods, in an attempt to minimise or cut the use of foreign currency on non-essential items amid dwindling foreign currency reserves, Prime Minister Phankham Viphavanh has told the National Assembly (NA).

The premier said changes to the quantity of vehicles, alcoholic beverages and other imported luxury items would be considered, so that shrinking foreign currency reserves could be kept for essential goods.

“All countries are adjusting (to the import structure),” he told the ongoing 3rd Ordinary Session of the NA’s 9th legislature.

“This is to reduce the amount of foreign currency flowing out (of the country).”

The prime minister last week responded to questions from Assembly members about the government’s plan to source more foreign currency to meet the country’s spending needs.

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Laos is suffering from a shortage of foreign currency, so the government is struggling to purchase and import sufficient essential items, notably fuel.

The lawmakers asked the government to consider eliminating the import of goods that Laos is able to produce, while suspending the import of luxury items.

“It is a reasonable suggestion which deserves consideration,” the PM said, adding that the cabinet would discuss the details of such a scheme.

In light of the foreign currency shortfall, the prime minister informed the session that the government has provided fuel importers with a Letter of Credit to enable them to bring in more fuel.

Earlier, Deputy Prime Minister Sonexay Siphandone told the National Assembly that the Letter of Credit, worth US$200 million, would be enough to buy 200 million litres of fuel which would cover the requirements for July and August of 100 million litres a month.

The government pledged to continue to provide foreign currency to importers during the remainder of the year so they could procure sufficient fuel. Laos imports 100-120 million litres of fuel a month on average.

Prior to the steep price hike, it cost US$600 to US$700 million to import sufficient quantities of fuel for one year.
But the amount spent has doubled in line with the spiralling price of fuel on the world market.