Govt to ensure more import-export payments through banking system

The government has vowed to ensure that at least 50 percent of Import and export payments are through the banking system by the end of 2023, in line with a resolution issued by the National Assembly issued in the middle of this year.
Prime Minister Sonexay Siphandone made this commitment while responding to a lawmaker’s question at the ongoing session of the National Assembly this week.

The government will ensure import and export payments are made through the banking system of Laos.

Regulating foreign currencies is part of the government’s efforts to handle economic challenges facing Laos, and this includes measures to ensure that more foreign exchange earned from exports and foreign investments enters the country via the banking system.
“We will place great emphasis on registering import-export companies and encouraging them to make financial transactions through commercial banks located in Laos,” Prime Minister Sonexay told the lawmakers.
The Premier said in 2022, only 34 percent of import and export payments were made through the banking system of Laos. The figure rose to 41.32 percent in September this year.
The PM ordered action to deal with any unlawful activities aimed at manipulating exchange rates, and the concerned sector has been tasked to monitor and identify target groups that carry out money changing activities.
At the moment, the government is in the process of restricting the import of luxury goods by increasing excise taxes on certain products. This is part of measures to reduce the amount of foreign currency spent on imports.
Prime Minister Sonexay said the government will also strive to combat illegal trade, particularly the illegal smuggling of goods along the border with neighbouring countries.
In addition, the government will encourage Lao people to boost agricultural production for exports, and further promote the use of Lao products to reduce imports and save foreign currency for the country.
On August 22, the Bank of the Lao PDR issued an order to implement the government’s credit policy, which is aimed at stimulating the economy.
Under the scheme, the government has allocated 2,500 billion kip to boost production and drive economic growth by subsiding the interest owed on loans taken by businesses from commercial banks.
Moreover, the government has allocated 4,500 billion kip to boost domestic production and stimulate economic growth under a new credit policy to distribute more funds to local areas.
The government has also pledged to regulate food prices to minimise the impact of high cost of living on the people. This will be done by intervening in market prices in Vientiane and some provinces.
Prime Minister Sonexay said it id critical to regulate the prices of animal feed and fertilisers to help farmers maintain the cost of production and boost their agricultural output for exports.
He told the National Assembly that the government is seeking sources of finance to repay debts owed to foreign countries and to prevent Laos from being dragged into default.

By Somsack Pongkhao
 (Latest Update November 17, 2023)