26 Jan, 2026

Laos Introduces Fines for Damaging, Misusing Banknotes

The Lao government began enforcing new rules on the use and handling of banknotes on 20 February, introducing fines for damaging or misusing cash to protect the kip and improve circulation.Under the decree, individuals who deliberately damage banknotes, such as scattering or stepping on them, or who sell new notes for profit will face fines of LAK 5 million (USD 230). Authorities said these practices show disrespect for the national currency and reduce the quality and lifespan of banknotes in circulation.The rules also prohibit practices that commonly damage cash, including writing on notes, using glue or tape, or stapling banknotes into ceremonial bouquets, a custom still seen at some celebrations in Laos.Meanwhile, the government reaffirmed the public’s right to exchange worn or damaged banknotes free of charge at any commercial bank. For a full exchange, more than 50 percent of the original note must remain intact.Banks now face stricter obligations under the decree. Financial institutions that refuse to exchange damaged notes or charge fees for doing so will be fined LAK 10 million (about USD 460)Fines will double for repeat violations, applying to both individuals and financial institutions. Officials said the penalties aim to reduce violations and strengthen compliance with the new banknote regulations.The Bank of the Lao PDR remains the sole authority responsible for printing, distributing, inspecting, and destroying banknotes.

21 Jan, 2026

Laos Inflation Falls to 7.7% in 2025, Showing Signs of Economic Stabilization

Laos’ average inflation fell to 7.7 percent in 2025, down sharply from 23.13 percent in 2024, according to the Bank of the Lao PDR (BOL), marking a significant easing in price pressures.The central bank presented the figures during a public meeting on 14 January. Officials said the improvement reflects greater price stability, supported by a relatively stable exchange rate and foreign exchange reserves sufficient to cover more than six months of imports, in line with national targets.Beyond inflation and liquidity trends, the central bank reported advances in institutional reforms. These include steps toward transforming the bank into a rural development-oriented institution and expanding cross-border payment system integration with neighboring countries, aimed at improving financial access and supporting economic activity.However, officials cautioned that challenges remain. Some economic targets approved by the National Assembly have yet to be fully met, and many households continue to face financial pressure.Previous reporting shows why the cost of living remains a concern. Although inflation eased in 2024, the National Statistics Bureau reported that the Consumer Price Index rose from 208.3 to 243.5, driven mainly by higher spending on essentials such as food, healthcare, and utilities.Healthcare and medicine were the largest contributors to rising costs in 2024 due to higher prices for imported medical supplies, while electricity, water, and cooking gas costs also increased. As a result, despite further inflation easing in 2025, everyday expenses remain elevated for many households.To address these pressures, the meeting reviewed the implementation of the 2025 Monetary Plan and discussed policy priorities for 2026, focusing on strengthening monetary management, maintaining financial stability, and supporting national economic objectives.