Laos: Central bank to take action over illegal foreign currency trading

• Apr 26, 2023

The purchase and sale of foreign currencies between individuals and legal entities is illegal and is prohibited, with only commercial banks authorised to trade in foreign currencies, the central bank has warned.
The Bank of the Lao PDR (BOL) on Monday issued a notice warning that the bank, in cooperation with the Ministry of Public Security, will strongly enforce the law in a bid to tackle illegal forms of currency trading.
The notice stated that the BOL had closed all 419 money exchange units across the country in recent years, meaning that Laos does not allow the operation of currency exchange units.
The move is part of the government’s attempt to tighten its monetary policy amid the depreciation of the kip and rampant inflation.
However, the central bank has authorised commercial banks to play a role in foreign currency trading, which should make it easier to regulate exchange rates.
Despite the fact that all money exchange units have been ordered to close, checks by the central bank found that some individuals and businesses were continuing to buy and sell foreign currencies.
In response to these illegal activities, the central bank has partnered with the Ministry of Public Security to inspect activities in currency trading, with legal measures being imposed on businesses and those who contravene the law.
The central bank urges local residents, traders, Lao and foreign businesses operating in Laos, state officials, soldiers, the police and foreign expats living in Laos to use the currency trade services provided by commercial banks or currency trading services authorised by the central bank.
According to the BOL’s two-page notice, members of the public must refrain from using currency exchange services provided by unauthorised sources including those advertised on social media and other online platforms.
The central bank discourages members of the public from using illegal sources when buying and selling foreign currencies, saying people need to change their ways and switch to legal sources when it comes to currency trading.
In January this year, the Bank of the Lao PDR ordered 113 money exchange units affiliated with commercial banks to suspend their operations, after revoking their business licences.
The government also pledged to place tighter controls on foreign currency earned from exports and the inflow of foreign currency from foreign investment, to ensure that more foreign currencies are in general circulation.

Source: https://www.vientianetimes.org.la/freeContent/FreeConten79_Central_y23.php