Laos: Authorities suspend currency exchange businesses affiliated with commercial banks Jan. 16

Event

The central bank of Laos (BOL) has suspended the licenses of 113 currency exchange businesses affiliated with commercial banks as of Jan. 16 to curb rising inflation rates. BOL has instructed commercial banks to discontinue their contracts with these businesses and close their deposit accounts. Additionally, currency exchange businesses are mandated to return any contracts or agreements to the Department of Monetary Policy or relevant BOL departments by Jan. 31. Officials also require commercial banks that intend to set up foreign exchange units to obtain a license from BOL. It is unclear if the government will take any legal action against violators of the new 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.

Advice

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