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Friday, July 19, 2024

Vientiane Authorities Crack Down on Illegal Currency Exchange Operators 

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Authorities in Vientiane Capital are struggling to control unlicensed currency exchange businesses amid a widening gap between official and market exchange rates.

Rising inflation and a continually depreciating local currency have seen many turn to illegal or online currency exchange operators to take advantage of favorable, unofficial rates.

Authorities already ordered currency exchange businesses to transition into representatives of commercial banks across the country last year.

However, enforcing the regulation has proven difficult. 

Lao Security News reports that police recently conducted inspections of illegal currency exchange businesses that failed to become representatives of commercial banks operating in Vientiane Capital. 

Authorities inspect a currency exchange business.

Some unlicensed currency exchange businesses persisted without authorization, according to the Bank of Laos and the country’s Economic Police Department.

According to finance officials, when the value of the Lao kip drops against the major foreign currencies such as US dollars or Thai baht, product prices rise accordingly.

Vientiane Times reported last week that the cost of imported household goods had risen by 15-50 percent in April compared to the figure recorded in January.

The increase in the price of imported household items has contributed significantly to year-on-year inflation in Laos, which reached 8.5 percent last month.

Online Currency Trade

Trading in currency and gold is conducted by social media platforms at market rates, with merchants and customers trading by electronic funds transfer.

According to Lao law, operating any kind of currency exchange businesses without authorization risks a fine of up to LAK 30 million. 

The World Bank recently downgraded its initial prediction for Laos’ economic growth rate from 4.5 percent to 3.8 percent for 2022.

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