Representatives of various joint venture banks display the signed documents at the ceremony on Monday.

BOL and leading banks agree to establish ‘Lao Foreign Exchange Market Company Limited’

The Bank of the Lao PDR (BOL) has signed an agreement with 11 commercial banks to set up the Lao Foreign Exchange Market Company Limited to promote an integrated and centralised foreign currency exchange system.
The company will support the newly developed foreign exchange platform, which is designed to ensure that people from all walks of life have comfortable access to foreign currencies, especially the Thai baht, the US dollar and the Chinese Yuan.
The Memorandum of Understanding (MoU) for creating the system was signed in August by 15 commercial banks in Laos, which are interested in investing in and setting up a centralised foreign exchange market.
The BOL, the nation’s central bank, held a ceremony on Monday for signing the joint venture agreement with 11 commercial banks for establishing the Lao Foreign Exchange Market Company Limited. The stakeholders will jointly invest for the establishment of the company.
The joint venture agreement was signed by the Head of the BOL office, Mr Phanousack Kenvongphachan, and members of the boards of directors of the commercial banks in the presence of the Acting Governor of BOL, Mrs Vatthana Dalaloy. The ceremony was also attended by the Deputy Governors of BOL, representatives of the relevant departments of BOL and the commercial banks and other guests.
During the same event, the Director General of the Monetary Policy Department of the BOL, Ms Fongchinda Sengsoulivong, highlighted the progress in establishing the foreign exchange platform since August with the collaboration of 15 commercial banks.
She said, “A memorandum of understanding for the establishment of the market has led to the development of an exchange system that is able to connect to the system of all the commercial banks. Following the readiness to open services to the public, the platform commenced from August 22, 2024 onwards.”
Ms Fongchinda said there was an open trial to use the currency exchange system through a mobile phone application.
Currently, a total of seven banks are participating in the service through the foreign exchange market. These are the Banque pour le Commerce Exterieur Lao Public (BCEL), Agriculture Promotion Bank, ST Bank, BIC Bank, Joint Development Bank (JDB), Lao Development Bank (LDB), and the Lao-Viet Bank (LVB).
Initially, there were only three currencies being exchanged on the platform – US dollars, Thai baht and Chinese yuan. The exchange is channelled through online platforms such as mobile applications or websites, which are supported by the Lao National Payment Network (LAPNET) system.
The LAPNET is helping and facilitating currency buyers and sellers through the market to conduct cross-bank transactions.
“Through the trial launch of the system, we have seen an increase of public interest and the customers are continuing to increase significantly,” Ms Fongchinda said.
She said the BOL has been working with various commercial banks to prepare conditions for the official opening of the company.
After the signing of the joint venture agreement, each of the shareholders will focus on completing the establishment of the company as soon as possible. The system of the official foreign currency exchange market will be opened at the end of October.
So far, a number of 12 banks have partnered for the joint venture, including the BOL, BCEL, Agricultural Promotion Bank, ST Bank, BIC Bank, JDB, LVB, LDB, IndoChina Bank, Lao-France Bank, Phongsavanh Bank and Maruhan Japan (Lao) Bank.

By Times Reporters
 (Latest Update October 8, 2024)