Problems relating to Trade and Investment on Laos

12. Exchange controls
Issue	Issue details	Requests	Reference

(1) Restricted Exchange of Lao Currency Kip into Foreign Currency

- A member firm's subsidiary (MFS) distributes products in kip, the local currency, and imports, in foreign currency, fertiliser and processing equipment (including consumable supplies) so that necessity arises for conversion of Kip in hand into foreign currency. However, Bank of Lao PDR (BLPDR) notification restricts currency conversion. It will likely impact MFS's business activity.
- In effect, payments in kip take place only in small transactions , while all other transactions are made in foreign currency. MFS must rely on remittance in foreign currency from its headquarters in Japan to meet its fund requirements, being unable to covert its kip capital fund into foreign currency.

- It is said that the Notification is prompted by the need to put a stop to the dwindling central bank foreign exchange reserve. However, it is requested that central bank pays attention not to disturb business activity in the private sector.
- It is requested that BLPDR allows FFEs' conversion of kips into foreign currency at commercial banks (including the online banking).

- "Central Bank Notification on Sales in Foreign Currency" of 5 August 2013

<<BACK