News Forum - Laos to ban public from holding foreign currencies

[Thaiger]

The Central Bank of Laos plans to ban residents from holding foreign currencies to address problems such as inflation, and the depreciation of the Kip. The Laotian Times yesterday reported that the Governor of the Central Bank of Laos, Sonexay Sitphaxay, promised to solve foreign exchange problems during a press conference on May 27. The governor acknowledged public concern regarding the country’s financial stability and says the central bank will launch a number of different policies to ensure that foreign currencies enter the Lao economy at an appropriate volume. Aside from the plan to ban possession of foreign currencies in […]

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[Fanta]

Does Laos have a problem with black market exchange rates? 

[EdwardV]

Shades of Sri Lanka. Low economic activity, rising inflation, depreciating currency, diminishing foreign reserves and heavy debt load. They checked all the boxes. Banning foreign currency will drive most of it into the government coffers but usually only buys a little time. Laos needs foreign currency to purchase energy and foreign goods, they are burning though theirs pretty fast. They need to restructure their debt and get a loan. However if they can’t restart the economy it’s not going to help.
 

Unfortunately they will not be alone with these problems. 

[palooka]

1 hour ago, Fanta said:

Does Laos have a problem with black market exchange rates? 

It will now.

[Fanta]

50 minutes ago, EdwardV said:

Shades of Sri Lanka. Low economic activity, rising inflation, depreciating currency, diminishing foreign reserves and heavy debt load. They checked all the boxes. Banning foreign currency will drive most of it into the government coffers but usually only buys a little time. Laos needs foreign currency to purchase energy and foreign goods, they are burning though theirs pretty fast. They need to restructure their debt and get a loan. However if they can’t restart the economy it’s not going to help.
 

Unfortunately they will not be alone with these problems. 

And their commies so they’re screwed.
 

[Poolie]

2 minutes ago, Fanta said:

And their commies so they’re screwed.
 

Not entirely.

[palooka]

They did this in the early 70's and it failed then.

Foreigners were a very rare sight in banks exchanging money at the official rate, you could get the black market rate at your hotel reception.

 

[Mudshark]

2 hours ago, Fanta said:

Does Laos have a problem with black market exchange rates? 

No. However that is the past. Thai baht, US dollars and Lao Kip were used interchangeably. Kip was better for street purchases, food, etc. Guest house, hotels, high end restaurants and tour operators were happy with kip, baht or dollars. Likely Yuan too.

Was looking forward to my first, post pandemic "tourist trip", to Luang Prabang next month. This comes just in time to  hairball it. Fingers crossed that will not happen.  

 

[cowslip]

Laos has always had a similar ban to this...but it was pretty much ignored. It meant that in places like Vientiane you could pay in Thai baht, dollars or just about any currency you wanted......... if this is strictly enforced, it may affect visitors quite detrimentally and also small traders.

Edited June 15, 2022 by Khunwilko

[cowslip]

1 hour ago, Fanta said:

And their commies so they’re screwed.
 

Pretty facile appreciation of politics there.

[Grumpish]

Wonder what the Chinese bailiffs are eyeing up for when Laos defaults on the loans it took for that shiny new railway?

[EdwardV]

6 hours ago, Grumpish said:

Wonder what the Chinese bailiffs are eyeing up for when Laos defaults on the loans it took for that shiny new railway?

You mean the soon to be Chinese owned railway. 

[cowslip]

3 hours ago, EdwardV said:

You mean the soon to be Chinese owned railway. 

If/when Laos defaults, China will take overland, hydro power stations and a total share of the railway. There are not many stations in Laos, and China is only interested in using the railway for access to ports in the west - Myanmar and Thailand. They won't have to bother to pay Laos nothing for whooshing through their country.

Loas is about the size of France but thanks to war and poverty, has a tiny population of about 5 million. This puts every Laos citizen into millions in debt.

China has a huge geographical problem with regards to trade - the Western half of this giant nation cannot be fully developed when everything they produce has to be shipped east and then navigate its way west past Vietnam, Indonesia Malaysia  Singapore etc and then to the Indian Ocean

Essentially Laos has a military regime like Thailand. These people are not elected on merit, they are inexperienced and not really of a level to negotiate or handle these kind huge international deals. Basically they have sold they own country from under themselves.

[Sumlee]

Communism / Marxism / Etc. have never worked. Here's another example. China's economy is also in a mess.

[Faz]

Stay on topic, please.
This isn't about the Lao/China rail line.

Moderator.

[HolyCowCm]

Not really surprised one bit. Most who lay with the CCP end up regretting it. So let’s hope they can straighten out their economy and stay afloat. I like Laos. 

[Sgtsabai]

Lao already has a big problem with black market money exchange. I just got back from about 2 weeks with my Lao family. In fact Lao has a big problem period. Gas stations were closed and when one opened unless you were there very early chances are after about a 3 hr. wait you were too late. I saw 2 farang visitors going and 1 coming back. There are many farangs in Vientiane, most with babies and I'd wager most expats. Beer Lao has even gone up to 40 baht a bottle outside Vientiane, Inside about the same as here for any beer. Lao is broke and china is smiling, plan happening as planed. The people are unhappy but lack the will to do anything about the situation, scared. But bless them they carry on and small parties or get togethers about every night where the beer Lao flows freely. No I wasn't paying.

Even the current "legal", as if anything there is, exchange rate is very favorable to the USD and according to a good friend from England so is the pound. He knew where to exchange, has long time family there. 

All said and done I like Lao, the people are more friendly than here, although before the coup, not so much. Health care frankly sucks. One caution, the only place I seen more thieves was Vietnam and when I was there we weren't very popular. People kept trying to kill me, seems they thought I was trespassing, they were correct. 

Edited June 16, 2022 by Sgtsabai
spacing

[TSS]

Lao- beautiful country,  people, culture. Too bad its screwed 'cause it's been tightly gripped by chinese communists for so long

[Poolie]

'Course it has. We have a history professor in our midst!

[TheDirtyDurian]

2 hours ago, Sgtsabai said:

Lao already has a big problem with black market money exchange. I just got back from about 2 weeks with my Lao family. In fact Lao has a big problem period. Gas stations were closed and when one opened unless you were there very early chances are after about a 3 hr. wait you were too late. I saw 2 farang visitors going and 1 coming back. There are many farangs in Vientiane, most with babies and I'd wager most expats. Beer Lao has even gone up to 40 baht a bottle outside Vientiane, Inside about the same as here for any beer. Lao is broke and china is smiling, plan happening as planed. The people are unhappy but lack the will to do anything about the situation, scared. But bless them they carry on and small parties or get togethers about every night where the beer Lao flows freely. No I wasn't paying.

Even the current "legal", as if anything there is, exchange rate is very favorable to the USD and according to a good friend from England so is the pound. He knew where to exchange, has long time family there. 

All said and done I like Lao, the people are more friendly than here, although before the coup, not so much. Health care frankly sucks. One caution, the only place I seen more thieves was Vietnam and when I was there we weren't very popular. People kept trying to kill me, seems they thought I was trespassing, they were correct. 

40 baht a beer. Tough times indeed...

[JamesR]

3 hours ago, Sgtsabai said:

Lao already has a big problem with black market money exchange. I just got back from about 2 weeks with my Lao family. In fact Lao has a big problem period. Gas stations were closed and when one opened unless you were there very early chances are after about a 3 hr. wait you were too late. I saw 2 farang visitors going and 1 coming back. There are many farangs in Vientiane, most with babies and I'd wager most expats. Beer Lao has even gone up to 40 baht a bottle outside Vientiane, Inside about the same as here for any beer. Lao is broke and china is smiling, plan happening as planed. The people are unhappy but lack the will to do anything about the situation, scared. But bless them they carry on and small parties or get togethers about every night where the beer Lao flows freely. No I wasn't paying.

Even the current "legal", as if anything there is, exchange rate is very favorable to the USD and according to a good friend from England so is the pound. He knew where to exchange, has long time family there. 

All said and done I like Lao, the people are more friendly than here, although before the coup, not so much. Health care frankly sucks. One caution, the only place I seen more thieves was Vietnam and when I was there we weren't very popular. People kept trying to kill me, seems they thought I was trespassing, they were correct. 

It sounds like a great place to avoid.

[Soidog]

On 6/15/2022 at 6:55 AM, Poolie said:

Not entirely.

Oh yes they are!

Oh no they’re not

Oh yes they are. 
 

Edited June 16, 2022 by Soidog
Forgot the silly smiley

[JamesR]

55 minutes ago, Soidog said:

Oh yes they are!

Oh no they’re not

Oh yes they are. 
 

Is this an half hour or one hour paid for argument (Monty Python). 

[Sgtsabai]

The government is communist, the people are not. Economically Lao is owned by china but the army is trained by Vietnam and many learn to speak English there. I met the #2 Lao General several years ago at the US Marine Corps Birthday Ball along with a couple of high ranking Vietnamese. A beautiful country in many ways but so 3rd world. Very large army bases by my lady's village and I've had the privilege of meeting a few of the soldiers stationed there. One would think the highways to and from Vientiane, about 21 clicks, would be well maintained if for no other reason, not. Falling apart, even relatively new AH 12 going all the way to china. There are many vehicles on the road, more every year and lots of big trucks along with fuel trucks  but yet little to no fuel although the stations are supposed to be open now. A shame it is in such bad condition that it won't be able to pay it's debt. 

Oh and for those that are free to "look" the ladies are quite attractive and not quite so money hungry, almost, as many of their Issan sisters are. Bars are open, just have to know where to look. 

[astro]

10 hours ago, Sumlee said:

Communism / Marxism / Etc. have never worked. Here's another example. China's economy is also in a mess.

Present day Laos bears no relation at all to communism, even less Marxism.

It is "socialist" in name only, but ruled by a handful of families - an oligarchy.