|
Central bank renews campaign for kip use
The Bank of the Lao PDR has renewed its efforts to promote the use of the Lao kip as foreign currencies still continue to circulate in the country.
The Monetary Policy Department of the bank has issued notices seeking cooperation with private and state organisations, including Lao media outlets, to help the central bank promote use of the national currency rather than the Thai baht or US dollar.
According to the notices, the central bank wants state and private enterprises to advertise the price of their goods and services in kip and for media organisations to show prices in kip in all publications.
Over the past few years, the central bank has conducted a number of campaigns aimed at promoting use of the kip but foreign currencies, in particular the Thai baht and US dollar, are still regularly used by Lao consumers.
According to a report from the Ministry of Planning and Investment, Lao kip deposits at commercial banks in Laos accounted for 42 percent of total deposits in May, with the reminder denominated in baht or US dollars.
Deposits made in kip at commercial banks jumped to about 48 percent in 2010, up from 34 percent in 2009, before dropping slightly in the middle of this year as the value of the kip fell against the Thai baht.
However, use of the kip has increased greatly in the past five or so years as Lao people have gained more confidence in the stability of the national currency, which has strengthened from 10,000 kip to the US dollar in 2005 to about 8,000 kip per US dollar at present.
According to policy makers and economists, a key to increasing use of the kip is not only raising awareness of the importance of using the national currency but also ensuring the stability of the kip.
Normally Lao people save money in foreign currencies because they want to make a major purchase such electronic equipment or a car. The central bank is working to assure Lao people that they can feel confident in the value of the kip and use it to build savings for major purchases, rather than using foreign currencies.
The government will need to increase exports of Lao goods to reduce its trade deficit in the long-term, which would also assist in stabilising the value of the kip, according to economists.
Th e central bank also believes that there is a need to promote use of the national currency as the increasing use of foreign currencies in Laos presents a negative image of the country and its people and also makes it difficulty for the central bank to implement its monetary policy.
vientiane times
|
