The Bank of Laos (BOL) and 15 commercial banks signed a Memorandum of Understanding (MOU) on 5 August to establish a centralized foreign exchange market to stabilize the national currency, improve transaction monitoring, and provide convenient currency exchange options.
The move comes in response to current economic challenges in Laos, such as inflation, the need for foreign currency for purchases, and high foreign debt, which has complicated the BOL’s efforts to track accurate exchange rates
By creating this centralized market, the BOL hopes to reduce underground currency trading and gather reliable data to inform better policy decisions.
Soulisack Thamnouvong, Director General of the Monetary Policy Department at BOL, stated that the concept for the market has been developed through discussions with the 15 banks. They have outlined the market’s goals, conditions, and transaction models, setting the stage for future research and development.
To ensure a smooth implementation of this initiative, the BOL plans to support the 15 banks through workshops, manuals, and additional research.
