Laos selects new central bank governor

Parliament elects Bounleua Sinxayvoravong as part of government reshuffle
Bank of the Lao PDR front entrance sign and flags
Bank of the Lao PDR
Photo: Spencer/Wikimedia

Laos has named a new governor to the central bank. The Laotian national assembly elected Bounleua Sinxayvoravong as part of a wider movement of personnel in senior posts, according to media reports.

Bounleua Sinxayvoravong comes to the Bank of the Lao PDR from the finance ministry, where he was deputy minister and, previously, a director-general.

He succeeds Sonexay Sitphaxay, who joins the cabinet as a minister in the premier’s office. Sitphaxay was previously deputy governor. He has led the central bank since 2018. He has been a full member of the central committee of Laos’s ruling Communist party since early 2021.

Laos has recently faced severe currency depreciation and a balance-of-payments crisis. Foreign currency has become scarce, and the Laotian Times reported that the central bank had imposed new restrictions on daily foreign exchange purchases on June 20. Purchasers may only obtain 15 million kip ($1,000) a day and must state why they require the currency.

High commodity prices and a weak currency have led to double-digit inflation and fuel shortages. Inflation reached 12.8% in May. The central bank increased its base rate by 10 basis points, to 3.1%, in May. Authorities have blamed informal bureaux de change for the shortage of currency.

On June 13, the central bank announced it would sell 5 trillion kip in bonds, at 20% annual interest. It said this would help “stabilise macroeconomic conditions amid the recent rise in domestic inflation, exchange rate volatility and high growth of money supply”.

Laos also has a heavy debt burden, which the World Bank estimated at 88% of GDP in 2021.

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