The Bank of the Lao PDR’s Monetary Policy Committee, at its second meeting of 2026, kept the central bank’s 7 day policy rate unchanged at 8% per year and endorsed continued use of a coordinated monetary policy mix to contain inflation and support exchange rate stability. The committee assessed that the Lao economy still faces significant risks, with fuel price pressures linked to conflict in the Middle East pushing inflation back into double digits in April 2026, while widespread use of multiple currencies in domestic payments, difficulties in foreign exchange management, high external debt and weak bank credit support for domestic production continue to constrain policy implementation. The meeting also reviewed implementation of the committee’s first 2026 decisions, monetary policy tools and exchange rate operations, fuel supply and fuel price management, foreign currency provision for fuel imports, related fiscal measures including tax and electric vehicle import policies, and progress in repaying public sector foreign currency debt. Measures approved for the period ahead include continued comprehensive foreign exchange management and control over trade and investment inflows and outflows, continued Treasury Single Account deposit consolidation, continued issuance of Bank of the Lao PDR bonds through a state managed market mechanism, and joint work with the Ministry of Finance and the Ministry of Industry and Commerce to review credit conditions and adjust policy as needed to strengthen lending for seasonal production, import substitution and exports.
Bank of the Lao2026-05-18
Bank of the Lao PDR keeps 7 day policy rate at 8% and approves further foreign exchange and credit measures
The Bank of the Lao PDR’s Monetary Policy Committee kept the 7‑day policy rate at 8% and reaffirmed a coordinated policy mix to contain inflation and support exchange rate stability amid renewed price pressures and ongoing foreign exchange and debt constraints. It reviewed earlier decisions and approved continued foreign exchange management, Treasury Single Account consolidation, central bank bond issuance, and joint work with fiscal and industry authorities to adjust credit policies supporting production, import substitution and exports.