VIENTIANE, July 21 (Xinhua) -- The Bank of the Lao PDR looks set to face a big challenge in keeping the value of the kip against the U.S. dollar stable, as the local market is ignoring the official reference currency exchange rate, local daily Vientiane Times reported on Saturday.
A number of currency exchange units in Lao capital Vientiane were on Friday offering an exchange rate of about 8,700 kip per U.S. dollar, which is obviously higher than the reference exchange rate set by the Bank of the Lao PDR, the Lao central bank.
The central bank on Friday maintained an official exchange rate of 8,423 kip per U.S. dollar, and this difference has significantly widened the margin between the official and the market rate.
The value of the kip against the U.S. dollar has seen a significant drop even though the Bank of the Lao PDR has set a reference rate in a bid to stablize foreign currency exchange, said the report.
Most consumer goods in Laos are imported so when the value of the kip drops against the major foreign currencies, product prices rise accordingly.
The Lao National Statistics Bureau announced recently that inflation was above 2 percent in June. The driving force of this rise was the higher fuel price, one of Laos' major imports.