New system to boost foreign currency management

The Ministry of Finance, the Ministry of Industry and Commerce, and the Bank of the Lao PDR will jointly implement a new system to help monitor and manage the flow of foreign currency in Laos.

Officials from BOL and ministries display signed Memorandums of Understanding on foreign currency management.--Photo Pasaxon newspaper

The system, called Capital Flow Management System (CMS), will link business registration, the Asycuda code, and the transactions of exporters and investors with commercial banks and the central bank. The system will also provide a dashboard for the relevant ministries to track the value and products of export and import activities.
Memorandums of Understanding were signed by the three participating entities at the National Convention Centre during the 2023 annual bank meeting.
The agreement was signed by the Head of Office of the Ministry of Finance, Mr Somchit Khammoungkhoun; Head of Office of the Bank of the Lao PDR, Mr Panusak Kaenvongphachan; and Head of Office of the Ministry of Industry and Commerce, Mr Bouavan Vilavong.
The Governor of the Bank of the Lao PDR, Mr Bounleua Sinxayvoravong, and other relevant parties witnessed the signing of the agreement.
The Memorandum of Understanding will serve as a basis for the exchange of information related to the monitoring of foreign currency flows between the two ministries and the central bank. The Capital Flow Management System is expected to be operational by the end of this month, according to the Pasaxon newspaper.
The system will offer several benefits to the public sector, business operators, and banks.
It will enable them to receive notifications about payments from specific destinations; plan their income on a daily, weekly, monthly and yearly basis; reduce the time needed to interact with the banks and related departments; track goods and their arrival time; sum up foreign investment accounts in material and cash form; and verify information with relevant parties in real-time.
The CMS aims to manage and monitor the movement of international funds, maintain economic and financial stability, hedge the risks from fluctuating exchange rates, and encourage investment and international trade.
The system covers the movement of all types of funds between countries, is easy and convenient to use, and is very secure.
In the future, the system may add links to other ministries, such as the Ministry of Planning and Investment, the Ministry of Agriculture and Forestry, and the Ministry of Energy and Mines.
The Bank of the Lao PDR will set a schedule for commercial banks to develop applications to connect with the central bank throughout the course of this year.

By Times Reporters
 (Latest Update February 14, 2024)