How can we restore the weakening kip?

The weakening kip has been affecting the living condition of people. The government has agreed to take steps to deal with these challenges, particularly those relating to the depreciation of the kip and spiralling inflation. The government has also pledged to collect more revenue to swell its coffers while reining spending and stabilising currency exchange rates.
Vientiane Times asked some people for their views on this contentious issue.

Ms Saisana Phutthakone, a resident in Luang Prabang province:  I hope the authorities can do something because the cost of living is rising much faster than our incomes. As we all know, almost everything we use is imported and prices are greatly influenced by exchange rates. I think it’s important to drive up the value of the kip and put more locally-made goods on shop shelves.
Mr Toy, a government official in Xekong province: It’s all about the government showing responsibility because only it can resolve this problem. The government should put in place rules to control the currency exchange rates. If possible, it should ban the private currency exchange sector, and encourage people to exchange currencies only at designated banks. Everyone should drive more value for Lao kip, the flowing currency in domestic should use only Lao kip.

Mr Vannasouk, a government official in Vientiane: I think this is a difficult problem to tackle because the main reason is the mismatch in the supply and demand of the Thai baht and US dollar. One of the main challenges for the government is the dire need to service its debts, while there is an ever-increasing demand for foreign currencies so that people can buy goods from other countries. This has contributed to the currency exchange problems we have today. The continuing depreciation of the kip is driving inflation and it costs businesses more and more to buy the foreign currencies they need to import goods. The situation is not helped by the fact that foreign currency availability at banks is limited. This creates openings for alternative or illicit ways to purchase foreign currencies, which drives up the exchange rate. So more people are taking advantage of the situation by setting up an illegal currency exchange business, especially online.

Ms Phone, a resident of Luang Prabang province:  
I know that not only Laos faces this problem; it’s commonplace in other countries as well. But Laos is heavily affected because we have to pay for goods with more foreign currency than we actually have. This is one reason why the value of the kip is low. Another problem is that Lao people like to buy things from other countries. Many of the things we need are not made in Laos, so we have to import them. It would be good if the government could solve this problem because it affects our standard of living. Some vendors use fluctuating exchange rates to their advantage, which is unfair, and I would like to call on them to stick to the rules. However, concerning currency fluctuations, we should do everything possible to save money and buy more Lao-made products than imported goods.

Ms Phetsada, a staff of Sikhottabong district, Vientiane: I don’t think it’s good that the government continues to allow currency exchange units to exist. I think this should be the sole preserve of banks, to prevent any problems. It’s all right to have external currency exchange units so long as they operate legally, but this is not always the case.

By Lamphone Pasanthong
(Latest Update June 2, 2022)