Laos: Authorities ban money changers from serving organizations, cap transactions with individuals as of June 20

Event

The central bank of Laos has banned money changers from serving organizations and capped the allowed transactions with individuals at LAK 15 million (USD 1,400) as of June 20. Individuals who transact with money changers must provide the reason for exchanging foreign currency and identification. Organizations can exchange foreign currency through banks; however, the banks must prioritize organizations that wish to purchase essential goods, such as fuel and medicine. The enforcement level of the policy likely varies across Laos. It is unclear if the government will take any legal action against violators of the regulation.

The policy may prompt business disruptions nationwide. Long lines may form at banks that serve the foreign currency exchanges for organizations. While unlikely, locals may demonstrate, especially in urban areas like Vientiane and Savannakhet, to protest the rule. Increased security and localized transport and business disruptions are likely near any rallies. Clashes are possible if security personnel attempt to forcibly disperse any gatherings.

Context

Authorities are implementing the foreign currency exchange policy to stabilize the foreign exchange rates, which have worsened in recent months. Reasons for the volatile foreign exchange rates include accumulating foreign debt and low foreign exchange reserves. The unstable foreign exchange rates have prompted several issues, including fuel shortages across Laos, in recent months.

Advice

Plan for possible business disruptions. Avoid any demonstrations as a precaution. Heed all official instructions.