A National Assembly member talks about the importance of agricultural development to support the government’s economic growth plan.
VIENTIANE: The Bank of the Lao PDR (BOL) has outlined key macroeconomic goals and monitoring targets aimed at maintaining monetary stability, curbing inflation, and strengthening the financial system in line with the government’s national socio-economic development strategy.
The five-year monetary plan for 2025–2030, to be presented for debate at the ongoing National Assembly (NA) session from Nov 10–21, states that the inflation rate should be managed at an average of no more than 5 per cent, with a fluctuation range of plus or minus 2 per cent.
Foreign currency reserves should be sufficient to cover at least five months of imports, while the ratio of non-performing loans (NPLs) will be kept below 3 per cent.
The plan states that the BOL will monitor the M2 money supply to prevent inflationary pressure and manage the exchange rate to reflect economic fundamentals. At least 85 per cent of export earnings are to be deposited into the banking system, while 85 per cent of the population should have access to financial services.
The BOL has also set a target for at least 35 per cent of micro, small and medium-sized enterprises (MSMEs) to access credit, with lending to the agricultural sector expected to rise to at least 20 per cent of total bank credit. The capital market will be strengthened to serve as a key source of fundraising, reaching 26 per cent of GDP.
To achieve these targets, the central bank will further refine monetary policy instruments, including the key policy interest rate, reserve requirement ratio, and commercial banks’ deposit and lending rates.
The open market and inter-bank markets will also be further developed to enhance liquidity management. In parallel, the BOL will promote greater use of the kip, reduce reliance on foreign currencies, and coordinate fiscal and monetary policy implementation through the Treasury Single Account system.
The plan further outlines measures to support domestic production, boost exports, and reduce imports, including setting credit growth limits for commercial banks and encouraging syndicated lending to improve capital management.
Mechanisms to regulate the price of gold, develop a gold exchange market, and stabilise essential commodity prices, potentially through a commodity auction system, will also be explored.
Many Assembly members on Tuesday urged the government, particularly the banking sector, to increase funding for agriculture in line with the self-reliant economy directive introduced by President Thongloun Sisoulith.
National Assembly member for Attapeu province, Souksamlan Xayaseng, said “A ‘self-reliant economy’ is defined as an economic ideology aimed at reducing heavy dependence on other countries. Therefore, the provision of sufficient funds for domestic production is essential and a key driver in achieving this goal.”
Although the BOL has achieved significant milestones across various areas over the past five years, the bank remains committed to implementing these measures and meeting these targets to ensure monetary stability and support the government’s macroeconomic objectives under the 10th Five-Year National Socio-Economic Development Plan. - Vientiane Times/ANN
