Vehicle sales in Laos are to be made strictly in kip this year in a bid to promote the national currency, according to Governor of the Bank of the Lao PDR, Somphao Phaysith.
Until now, vehicle sales in Laos have typically been made in foreign currency, which is in breach of the law, Mr Somphao went on.
Payments in foreign currency will not be completely prohibited, however new regulations will require vehicle purchases in foreign currency to be made via a bank transfer.
Meanwhile, car dealers remain reluctant to comply with the announcement, and say the regulations have caused a number of difficulties.
One major setback is that customers tend to be concerned about the risks of carrying large amounts of kip when making a vehicle purchase in cash, usually 500 million kip or more.
Another issue faced by dealers is their use of foreign currency when importing vehicles and parts, whereby they are unable to predict fluctuation in exchange rates, and some dealers have called on the government to keep exchange rates stable.
Governor Somphao said that the Bank of the Lao PDR will undertake routine checks to ensure that dealers are accepting kip for vehicle purchases.
The Bank of the Lao PDR has already implemented measures for controlling currency exchange by instituting limits on the purchase of foreign currency, and the bank is making headway in promoting awareness of the importance of using the local currency, Lao kip, among the population.
