The central bank of Laos PDR - Image from Laotian Times
VIENTIANE, June 13: The central bank of Laos PDR will issue LAK 5 trillion in savings bonds to individuals and legal entities residing in the Lao PDR, except for commercial banks and depository financial institutions, reports Laotian Times.
A notice issued by the Bank of Laos PDR states that the first portion of a 5,000,000,000,000 Kip (five trillion Kip) bond will have a six-month maturity and a one-time non-transferable interest payment rate of 20% per year.
The bond will be scripless, issued directly to bondholders, and will be available in mid-June.
Banking institutions interested in representing the Bank of the Lao PDR in the bond issue will receive a bond payment fee of 0.047% of the value of the bond.
In May, Laos’ inflation rate reached 12.8 per cent, the highest point in 15 years.
Over the course of a month, there was a 3.3 per cent increase, but an 11.3 per cent increase over the same period last year.
According to a recent report by the World Bank, the kip has depreciated sharply in 2021-22, by about 30% against the US dollar over the year up to April 2022, reflecting considerable external liquidity constraints.
The limited availability of foreign currency, combined with high demand for imports and debt service repayments, has resulted in a demand-supply mismatch, creating strong depreciation pressures, despite significant debt service deferrals.
These saving bonds are intended to help mitigate the issue. - Laotian Times/ANN
