What can be done to stop goods being traded in foreign currencies?

The pricing and sale of goods in foreign currencies is illegal and the government is urging all businesses and vendors to sell goods only in kip. But with numerous goods and services purchased in foreign currencies, Vientiane Times asked a cross section of people whether they thought this was appropriate.

 
Ms Missana Sackvisith, a resident of Vientiane: I think the sectors responsible should keep a close eye on this issue and encourage more transactions using the kip, as this would drive up the value of the kip and help to reduce inflation. But I don’t think this is something that can be changed quickly, because the use of foreign currencies had been common for a long time. Almost everything we use is imported and prices are greatly influenced by exchange rates. I think it’s important to do whatever it takes to increase the value of the kip and put more locally-made goods on shop shelves.

Ms Lattana Viengsy, a business operator in Xaysettha district, Vientiane: I agree with the government’s view and of course I would like to see a stronger kip. The government needs to stabilise exchange rates, as unfavourable rates are causing serious problems. If nothing is done, nothing will change, and the problem will just get worse. One of the problems is that if goods are priced in kip, customers always say things are expensive. But of course, the price of goods must be based on exchange rates that are higher than those offered by banks so that businesses make enough profit to buy the foreign currencies they need to buy more goods.  
 
Ms Phonmany Savan, a resident of Xaythany district, Vientiane: I agree with the drive to stop goods being priced in foreign currencies. If all businesses did their trade in kip, it would help to increase the value of the currency. It would also be good if more people in Laos manufactured goods for use in this country. Today, many of the things we need are not made in Laos, so we have to import them. This means business operators and vendors have to purchase goods in foreign currencies, which are becoming more and more expensive because of the weak kip. The best thing the government can do is to cut back on imports and promote Lao products. This would make it easier to stabilise prices.
Mr Lad, a government official in Xaysomboun province: It’s a good idea to stop the sale of goods in other currencies. But that only tackles the problem in the short term and doesn’t address the root causes. I know that almost everything we use is imported so of course vendors will try to sell goods in foreign currencies if they can, so they can buy in more stock. And their sale price will always be based on the highest rate of exchange, which is not the bank rate. Because banks are reluctant to sell foreign currencies, this paves the way for private individuals to sell currencies at a higher cost. The government should enforce rules to control currency exchange rates. Privately-run exchange units should be closed down and currencies should be traded only at banks. Everyone should do what they can to strengthen the kip and use it in as many transactions as possible.

By Lamphone Pasanthong
(Latest Update June 21, 2022)