Laos to liberalise cross-border transactions

Laos said it would eliminate restrictions on international payments and transactions after it reached an agreement with the IMF on Wednesday.

Vientiane told the IMF it would accept the obligations of the eighth article of the IMF's Articles of Agreement, which prevent countries from restricting payments and transfers for current international transactions, or discriminating on currency arrangements or multiple currency practices, except with IMF approval. By accepting the obligations of Article VIII, Laos has signaled its intent to liberalise its economic policies which will make restrictions on payments and transfers for current international transactions unnecessary. It will also contribute to a multilateral payments system free of restrictions.

Laos becomes the 167th of the IMF's 187 members to have accepted the obligations of article VIII.

Previously, Laos restricted payments and transfers on international transactions, maintaining such restrictions were imposed for the preservation of national or international security.

In August 2004, the IMF's legal department and monetary and capital markets department conducted a review of the exchange system in Laos to establish measures that would facilitate the country's acceptance of Article VIII.

The Laos government said the move be backdated and would come into effect from 28 May 2010.