VIENTIANE, Aug. 22 (Xinhua) -- The Lao central bank announced Friday to lower its 7-day basic interest rate from 9.5 percent to 9 percent, offering relief to businesses and households while stimulating economic growth as inflation continues to ease.
This marks the third reduction in 2025, following cuts from 10.5 percent to 10 percent in March and to 9.5 percent in June, according to the announcement of the Bank of the Lao PDR (BOL).
The decision aims to lower financial pressure, make borrowing more affordable, and boost domestic spending and investment, it said.
The interest rate cut follows a sharp decline in inflation, which dropped from 8.3 percent in May to 5.3 percent in July, after averaging over 10 percent in the first half of 2025. This marks a notable recovery from 2023 when inflation hit 40.3 percent, following the COVID-19 pandemic and rising fuel and food costs.
Despite the positive outlook, the BOL warned that risks such as global economic uncertainties, fluctuating oil and gold prices, and potential shifts in U.S. interest rates remain. ■
