Doctors at Japan Heart Children’s Medical Centre call for blood donations to help children on June 15. SUPPLIED
The value of the kip when exchanged for other currencies at commercial banks in Laos has gradually decreased, with the Bank of the Lao PDR (BoL) issuing a neutral rate of 8,864 kip per US dollar as of Wednesday.
The rate of exchange of the kip against the US dollar and Thai baht has been fluctuating over the past months with several factors at play, including higher demand for imported consumer goods.
As of Tuesday, the buying price of kip at the Banque pour le Commerce Exterieur Lao Public (BCEL) was 8,865 kip per US dollar, while the selling rate was 8,883 kip.
On Wednesday, the buying rate rose from 8,865 kip per US dollar to 8,868 kip and the selling rate was up from 8,883.00 kip per US dollar to 8,886 kip.
The official rate of 8,864 kip per US dollar was issued by BoL’s Monetary Policy Department on Wednesday as a reference or guideline for other banks and money exchange units in Laos.
Speaking at a recent meeting of the planning and finance sectors, BoL governor Sonexay Sithphaxay said the differences in the exchange rate between the official and market rates was because of the increased demand for imported consumer goods.
Last year, BoL initially set the amount by which the neutral and market rates should not differ at two per cent, but after the first 11 months the difference was recorded at 3.3 per cent.
Sonexay said the central bank will attempt to keep the difference between the neutral and market exchange rates below five per cent this year so that the kip does not fall below 8,800 to the US dollar. But this will be subject to changes in the economy.
“Coordination within the government and other concerned parties is needed to seek solutions together on how to reduce the amount of imports and increase exports to balance the trade deficit,” he said.
Sonexay added that the central bank will continue to work with the Ministry of Planning and Investment to seek ways to address the overseas payment process for investment projects undertaken in Laos, which is currently hindering the inflow of foreign currencies.
The recent meeting was co-organised by the Ministry of Planning and Investment and the Ministry of Finance. It was co-chaired by Deputy Prime Minister and Minister of Planning and Investment Sonexay Siphandone, and Deputy Prime Minister and Minister of Finance Somdy Duangdy.
VIENTIANE TIMES/ASIA NEWS NETWORK
