What should the government do to stop the illicit sale of foreign currencies?

Police are investigating the operations of currency exchange units that are not associated with a bank as required by law. Rising inflation and the continuing depreciation of the kip have seen many people turn to illicit or online currency exchange operators to take advantage of more favourable, unofficial rates. Vientiane Times asked around for opinions on this situation.

Mr Sanguan Sonsouphanh, 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 Vongkham, an online vendor in Xaysettha district, Vientiane: I’m glad the authorities are cracking down on this problem because it affects me as a vendor. I’d prefer to change money at a bank because the exchange rate is fair, but they have limits on the amount of foreign currency they will sell. Sometimes we need a lot of foreign currency to pay for the goods we import, but the banks won’t give us much so we have to get the money elsewhere. Even if we have to buy at a higher rate, we have no choice. It would be good if the central bank stamped out illegal currency exchange units so that the situation is better regulated and things improve. All vendors should be able to acquire foreign currencies in ways that are fair and transparent, while supply should match demand.   

Mr Vankeo Hemmavan, a resident of Sisattanak 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.
 
Ms Bualoy Bounlitsavng, a resident of Luang Namtha province:  It’s true that the currency exchange rates are affecting everyone. This is because some business operators use fluctuating exchange rates to their advantage, which is unfair and causes disturbances in the market. I’d like the authorities to crack down on business operators who act illegally, to prevent people from being cheated. I also urge everyone involved in currency operations to stick to the rules. To counter exchange rate fluctuations, we should do everything we can to save money and buy more Lao-made products than imported goods, as this would reduce the need for foreign currencies.

Owner of the KK money exchange unit: We are operating in line with the regulations in association with Vietin Bank Lao. Every day we update the exchange rates so they are the same as the bank’s. I would like the authorities to put a stop to illegal currency exchange operations because they interfere with financial concerns. They drive up the exchange rates and are at odds with official banking policies. I urge members of the public to check the exchange rates issued by banks and to buy money only at legal currency exchange units.

By Lamphone Pasanthong
(Latest Update April 29, 2022)