The recent appreciation of the Thai Baht (THB) against the US Dollar (USD) has affected the Lao Kip (LAK) exchange rate, the National Bank of Laos (BOL) said.
The baht strengthened to a multi-year high over the weekend, with the USD/THB exchange rate falling from 34.21 baht to 1 US Dollar at the end of 2024. This year, the USD/THB exchange rate is around 31.14 baht/US Dollar, representing a nearly 10% appreciation of the baht.
In its monthly report dated December 30, the State Bank of Laos reported a US dollar buying rate of 21,503 kip/US Dollar and a selling rate of 21,713 kip/US Dollar, while full-year data is still being finalized.
The National Bank of Laos said the baht’s appreciation was largely due to the weakening of the dollar following the US Federal Reserve’s decision to cut its benchmark interest rate by 0.25 percentage points, coupled with active gold trading in Thailand recently.
The appreciation of the baht has led to a fluctuation in the bilateral exchange rate of the Lao kip. Currently, the Lao kip exchange rate against the Thai baht is around 685 kip/baht, compared to 631 kip/baht at the end of 2024, which corresponds to a depreciation of the kip of around 7.9%.
The National Bank of Laos stated that regional and international currency fluctuations always affect Laos’ foreign exchange market, especially in the context of continued high trade and investment with Thailand.
Significant fluctuations in the US dollar and Thai baht may affect import costs and the price level of some domestic goods.
BOL, the National Bank of Laos, is closely monitoring the financial market and continues to implement appropriate exchange rate management measures, including flexible liquidity management both domestically and internationally.
Effective management of foreign exchange reserves, and strengthening supervision of the activities of commercial banks and foreign exchange trading organizations.
In addition, the National Bank of Laos promotes the use of kip in domestic transactions, complies with regulations on foreign exchange management, and enhances its data monitoring system to ensure timely policy responses to market fluctuations.
The National Bank affirms that it will continue to monitor regional and global economic developments to support the stability of the financial market and contribute to maintaining a favorable macroeconomic environment.