KPL
The Bank of the Lao PDR (BOL) has outlined measures to control inflation, stabilize the Lao kip and promote credit for domestic production as the National Assembly reviews the country's economic and monetary situation.
(KPL) BOL Governor Bounkham Vorachit presented the measures while responding to questions from National Assembly members during the second ordinary session of the 10th National Assembly on October 7, 2026.
She said inflation averaged 7.9 percent during the first nine months of 2026, exceeding the National Assembly's target of 5 percent plus or minus 2 percentage points. Electricity and fuel prices, as well as exchange-rate movements, were identified as major factors contributing to inflation.
For 2027, the BOL aims to bring average inflation down to between 5.5 and 5.8 percent and keep it below 6 percent.
To achieve this, the BOL will focus on four main areas.
First, it will manage money supply and credit growth at an appropriate level while supporting stability of the Lao kip. Credit growth is currently about 17.6 percent, with the BOL seeking to keep it below 16 percent annually.
Second, the BOL will strengthen foreign-exchange management and exchange-rate stability. Measures include developing foreign-exchange risk-hedging tools, strengthening supervision of the foreign-exchange market, curbing informal currency trading and studying mechanisms for larger-scale foreign-exchange transactions through the banking system.
The BOL will also explore auction-based foreign-exchange trading and strengthen the interbank market to improve exchange-rate management and build foreign-exchange reserves.
Third, the BOL will coordinate with the Ministry of Industry and Commerce to manage imports, particularly fuel imports, in line with current economic conditions.
Fourth, the central bank will promote credit for agriculture and productive sectors aimed at replacing imports and increasing exports. Commercial banks with excess liquidity will be encouraged to expand lending to these sectors.
The BOL will also study mechanisms for managing prices of essential goods and consider establishing a goods auction market to improve price management.
Governor Bounkham thanked National Assembly members for their recommendations and said the BOL would continue reviewing and improving the banking sector's operating mechanisms to strengthen efficiency and support economic stability.
KPL
