Bank of Laos Shuts Down 113 Currency Exchange Businesses

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The Bank of the Lao PDR (BOL) issued a notice on Friday instructing 113 exchange businesses affiliated with commercial banks to suspend their operations.

The notice states that the BOL has revoked the business licenses of the 113 exchange businesses that are associated with six commercial banks in the country. It also instructed the banks to discontinue their contracts with these businesses.

BOL will now proceed to close the deposit accounts of registered currency exchange businesses that worked with commercial banks. Exchange businesses have been urged as well to return any contracts or agreements to the Department of Monetary Policy or the relevant departments of the BOL by 31 January.

Commercial banks that intend to establish foreign exchange units have been asked to comply with the policy on foreign exchange services with the central bank. As per the policy, individuals or entities must first obtain the proper license from the central bank for the purpose.

Additionally, individuals or companies are only allowed to run exchange businesses if they are associated with the tourism or hospitality industry. This was done to control the exchange rates of foreign currencies within the country.

This suspension has taken some businesses by surprise as the central bank had ordered currency exchange businesses to transition into representatives of commercial banks across the country in 2021.

In October 2022, the Bank of Lao PDR banned exchange units associated with commercial banks from selling foreign currency and also limited daily foreign currency transactions.

The Bank of Lao PDR chose not to comment on this notice when contacted by Laotian Times.