The Bank of the Lao published a year-end review of its key work in 2025, outlining macro-financial conditions and progress across supervision, payments and international engagement. The update highlights a sharp easing in inflation, broadly stable exchange rates within the banking system, and continued modernisation of payment services and the supporting legal framework. Inflation was reported to have fallen from 16.9% in December 2024 to 5.6% in December 2025, while the exchange rate across the banking system remained broadly stable. Most commercial banks and non-bank financial institutions were assessed as able to comply with stability rules issued by the Bank of the Lao. The payments system expanded cross-currency services for trade and investment and connected cross-border retail payment systems with Thailand, Vietnam, Cambodia and China, alongside the creation and updating of a number of legal instruments. International work included engagement with the International Monetary Fund’s 2025 macroeconomic assessment mission, cooperation with Vietnamese experts under a macroeconomic reform workstream, and hosting annual bilateral meetings with the State Bank of Vietnam and the National Bank of Cambodia; the central bank also coordinated sectoral risk assessments following Laos’ inclusion on the Gray List, amid ongoing external volatility and high external debt servicing pressures. In closing remarks, Governor Bounkham Vorachit asked staff to prioritise keeping inflation within the set level, building foreign exchange reserves to cover imports in line with plans, strengthening the resilience of banks and financial institutions, and maintaining a safe, modern and regionally connected payments system.
Bank of the Lao 2025-12-29
Bank of the Lao publishes 2025 work review reporting inflation down to 5.6% and cross-border payments linked with four countries
The Bank of the Lao's 2025 year-end review highlights a drop in inflation from 16.9% to 5.6%, stable exchange rates, and advancements in payment services and legal frameworks. The report notes compliance with stability rules by most financial institutions and expanded cross-border payment systems with neighboring countries. International efforts included collaboration with the International Monetary Fund and regional banks, amid challenges from external volatility and high debt servicing pressures.