Bank of Laos to Take Legal Action Against Unauthorized Foreign Currency Trading

Bank of Laos to Take Legal Action Against Unauthorized Foreign Currency Trading
This image is used only for representational purpose (photo: J&C Group)

The Bank of Lao PDR (BOL) issued a notice on Monday to warn individuals and companies against unlawful foreign currency trade in the country to avoid being prosecuted for the same. 

BOL has declared foreign currency buying and selling from unauthorized money exchange units to be illegal, advising residents to use only commercial banks or currency trading services permitted by the central bank for such transactions.

The bank aims to enforce the law by tracking down those involved in illegal foreign currency activities with support from the Ministry of Public Security. The notice emphasized that people must avoid using unauthorized online sources for currency exchange services as well.

Vientiane Times has reported that the crackdown is a part of the government’s attempt to tighten the country’s monetary policy, especially considering the possibility of kip depreciation and high inflation. Meanwhile, BOL has authorized commercial banks to play a role in foreign currency trading, allowing for better regulation of exchange rates.

The central bank also advised residents to be cautious of unauthorized currency trading activities advertised on social media and other online platforms. The notice encouraged the use of authorized trading services provided by commercial banks, which is likely to make currency exchange more convenient to regulate.

In January, the Bank of Laos revoked the business licenses of 113 exchange businesses affiliated with commercial banks in the country, instructing the banks to discontinue their contracts with them.