Bank of Laos and the People’s Bank of China have signed a memorandum of understanding regarding future payments in Yuan.
Bank of Laos has issued a statement that the Governor of the Bank of Laos, Mr. Bounleua Sinxayvoravong, and the Governor of the People’s Bank of China, Mr. Yi Kang have signed an MOU to facilitate this move.
The payment mechanism will be set out in detail in a circular to be published by the Bank of Laos.
The banking systems of both nations will establish exchange rates directly without using USD as a middleman.
Bank of Laos believes that this will encourage enterprises and financial institutions of both countries to use Yuan as the currency in cross-border transactions and to promote bilateral trade and investment in the future.
In July, the National Treasury and the Industrial and Commercial Bank of China (ICBC) begun cooperation in systems for payment of taxation into the state budget.