KPL
The Bank of the Lao PDR (BOL) will implement five priority measures to contain inflation and achieve the National Assembly's target of keeping average inflation below 7 percent in 2026.
The announcement was made by BOL Governor Bounkham Vorachit while responding to questions from National Assembly members during the First Extraordinary Session of the 10th National Assembly on July 7. The discussions focused on inflation, exchange rate stability, foreign exchange management, and access to financing.
The first priority is to stabilize the exchange rate by narrowing the gap between commercial bank and informal market rates, expanding the foreign exchange trading market for large businesses, and ensuring adequate foreign currency for essential imports, particularly fuel.
Second, the central bank will maintain prudent control of the money supply through coordinated monetary policy, including adjustments to benchmark interest rates, reserve requirements, and the continued issuance of short-term BOL bonds. It will also continue implementing the Treasury Single Account system.
Third, the BOL will strengthen foreign exchange management by increasing the share of export earnings entering the banking system, promoting the use of the Lao kip in domestic transactions, encouraging settlement in regional currencies with neighboring countries, tightening gold trading regulations, and strengthening external debt management.
The fourth priority focuses on working with the Ministry of Industry and Commerce to improve price management for essential goods and production inputs, while studying the establishment of a commodity trading market to enhance price stability.
Finally, the BOL will continue promoting productive investment by encouraging commercial banks to expand quality lending to agriculture, processing industries, SMEs, and import-substitution businesses. The central bank will also study additional incentives, including revised loan classification regulations and interest-rate support mechanisms, to lower production costs and strengthen domestic economic growth.
Governor Bounkham said the measures are intended to safeguard macroeconomic stability, strengthen confidence in the national currency, and support sustainable economic development.
KPL
