Laos cuts interest rate to support financial stability
The Bank of the Lao PDR (BOL) has decided to lower its 7-day basic interest rate from 8.5 percent to 8 percent in a move aimed at maintaining monetary stability in Laos.
The decision was approved during the first Monetary Policy Committee meeting of 2026, where members reviewed the performance of existing monetary policy instruments and discussed policy directions for the year ahead, according to a BOL report released on Monday, News.Az reports, citing Xinhua.
The meeting, held Friday in the capital, Vientiane, noted ongoing uncertainty in the global economic environment. This volatility has affected fuel, energy, gold and food prices, and is expected to weigh on global economic growth.
On the domestic front, the committee identified several continuing challenges. These include a fragile economic structure, sustained demand for foreign currency to service external debt, exchange rate fluctuations, and credit growth that remains misaligned with broader structural economic objectives. Despite these pressures, coordinated policy measures are projected to help keep inflation at around 5 percent.
To safeguard monetary stability, the committee endorsed several key policy directions for 2026. These include maintaining a managed float exchange rate regime and refining monetary tools such as interest rates, reserve requirements and the issuance of short-term BOL bonds.
The central bank also emphasized the importance of closely monitoring exchange rate movements to mitigate inflationary risks.
News.Az
By Nijat Babayev
