Laos: Illegal Currency Exchange Services Causing Price Hikes
A senior Lao government official has warned that unregistered currency exchange services that violate currency regulations must be punished.
A number of foreign currency exchange services in Laos are openly flouting regulations, exacerbating the fluctuation of exchange rates, Vice President of Lao National Chamber of Commerce and Industry (LNCCI,) Ms Valy Vetsaphong said during a consultative meeting between public and private sector representatives on 6 August.
“Exchange units operated by banks are tightly controlled, but there is no effective measure to regulate money changers that are outside the system,” Ms Valy added, as quoted by Vientiane Times.
She said there is a greater possibility that the large amounts of money exchanged outside the system could cause fluctuation in the currency and exchange rate, noting that transactions through the banking system are one way of ensuring that banks can regulate such rates.
Laos is currently facing inflation and high consumer expenses amid the declining value of the kip against the US dollar and Thai baht.
The value of the kip against the US dollar fell by 0.9 percent and by 3.5 percent to the baht over four months from January, according to a report from the Minister of Planning and Investment, Dr Souphan Keomixay.
Most consumer goods in Laos are imported, so when the value of the kip drops against the major foreign currencies, product prices rise accordingly.
Meanwhile, Ms Valy also cited the widespread use of foreign currencies as a possible reason causing the weak value of kip.
The use of US dollars and Thai baht are still common across the country, particularly in Vientiane, despite efforts by the Bank of Laos to crack down on the practice.