Thailand
Laos: Central bank to strength foreign reserve management
The Bank of the Lao PDR will boost cooperation with commercial banks and enterprises to improve the management of money flow, aiming to comply with the regulations on the control of foreign reserves and strengthen the process.
Responding to questions from National Assembly members during the ongoing debate session last week, Deputy Governor of the Bank of the Lao PDR, Ms Vattana Dalaloy, said foreign reserves had remained stable over the last few years in keeping with economic mechanisms.
In 2015, reserves stood at US$986.8 million, falling to US$814 million in 2016 and rising to US$958.7 million in the first six months of this year, she reported.
According to economic theory, the rise and fall of foreign currency reserves should equal the increase and decrease in foreign transactions.
In the first six months of this year, foreign transactions amounted to a quarterly average of US$72 million on paper, but this did not correspond to the actual increase in foreign currency reserves, Ms Vattana said.
The figure recorded did not reflect the amount of money that was actually brought into the country, she noted.
This year, although there had been an upward trend in exports, the income earned from exports by large scale projects in the mining and electricity sectors had not yet been transferred to Laos.
In the first six months of this year, the export value of mineral products reached US$674.2 million but only US$67.5 million of this was transferred.
In addition, the export value of electricity had exceeded US$599.9 million but only US$21.5 million of this amount had been transferred, Ms Vattana said.
Foreign investment continued to rise by an average of US$406.5 million per quarter this year but, again, most of this had not been transferred to Laos. So far, only the equipment needed for foreign-owned projects had been brought into Laos as these could not be produced in-country, she added.
At present, foreign currency reserves are sufficient to import goods for a period of 4.14 months, according to the central bank.
The value of the kip saw an average drop of 1.18 percent against the US dollar but a 0.88 percent rise against the Thai baht over the year.
At present the value of the kip stands at 8,287 kip per US dollar when buying and 8,324 kip when selling, while one baht buys 251.47 kip and sells for 253.36 kip.
Source: http://www.vientianetimes.org.la/FreeContent/FreeConten_Central.html