Mr. Phanousack Kenevongphachanh, Director General, Cabinet Office, Bank of the Lao PDR

(KPL) The Bank of the Lao PDR (BOL) has welcomed the growing public awareness of the importance of using the Lao kip for domestic transactions.

Merchants are encouraged to use the kip widely, a practice which is commendable and has been positively received by society.

Mr. Phanousack Kenevongphachanh, Director General, Cabinet Office, Bank of the Lao PDR, stated that according to the revised Foreign Exchange Management Law, which came into effect in July 2022, only the kip is legally recognized as a medium of payment within the Lao PDR. All product price listings, payments, and receipts within the Lao PDR must be in kip. Foreign currency exchanges must be conducted through licensed commercial banks and financial institutions.

Exchange rates are determined solely by commercial banks, and product pricing must align with the bank's exchange rates to comply with the law. Individuals and organizations are permitted to hold foreign currency accounts and conduct foreign exchange transactions in accordance with the regulations and purposes defined by the law.

Regarding society's rising awareness in promoting the use of kip, it is important to ensure proper understanding and avoid creating confusion or misconceptions. The initiative reflects the community's voluntary effort to support the use of kip for domestic payments, reducing the reliance on foreign currencies, which have been commonly used.

This helps mitigate the impact of exchange rate fluctuations, inflation, and ensures that foreign currency holders, both Lao and foreigner, exchange them at banks for kip before using them domestically, in compliance with the law, similar to other countries. Every currency has its significance and value and should be used appropriately according to established legal and regulatory framework.

The Bank of the Lao PDR calls on society to cooperate in promoting the use of kip for domestic transactions under the slogan: "In Laos, use only the kip", set exchange rates accurately and exchange foreign currencies at banks before spending to strictly implement foreign exchange management regulations. In the near future, the Bank of the Lao PDR will issue detailed guidelines on how to appropriately settle payments for goods, services, and debts within the Lao PDR.

KPL