VIENTIANE, Feb. 23 (Xinhua) -- The Lao central bank will reduce its 7-day basic interest rate from 8.5 percent to 8 percent in a move aimed at maintaining monetary stability in Laos.
The measure was approved at the first Monetary Policy Committee meeting of 2026, which reviewed and assessed the performance of monetary policy instruments and discussed future policy directions, according to a report from the Bank of the Lao PDR (BOL) on Monday.
The meeting, held in the Lao capital Vientiane on Friday, highlighted continued uncertainty in the global environment, which has contributed to volatility in fuel, energy, gold and food prices and is expected to slow global economic growth.
Domestically, the committee noted persistent challenges, including a fragile economic base, strong demand for foreign currency to service external debt, exchange rate fluctuations, and credit growth that remains misaligned with structural economic objectives. However, coordinated policy measures are expected to help keep inflation at around 5 percent.
To safeguard monetary stability, the committee endorsed 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, along with close monitoring of exchange rate movements to mitigate inflation risks. ■
