VIENTIANE, May 20 (Xinhua) -- The Lao central bank, the Bank of the Lao PDR (BOL), convened its second Monetary Policy Committee meeting of 2026 to assess recent economic developments and outline measures to maintain monetary stability and support economic growth.

File photo: IC

The meeting, held in Lao capital Vientiane on Monday, reviewed the implementation of resolutions adopted during the committee's first meeting of 2026, including the use of monetary policy instruments, exchange rate management, fuel supply issues, and financial measures introduced in response to the ongoing conflict in the Middle East, according to a report from the BOL on Wednesday.

The meeting noted that Laos continues to face major economic challenges in early 2026, including global uncertainty, sharp rises in fuel prices, and persistent inflation, which reached double digits in April. The committee also highlighted that the widespread use of foreign currencies in domestic transactions continues to limit the effectiveness of monetary policy implementation.

The committee highlighted ongoing difficulties in foreign exchange management due to a large informal economy and high external debt obligations, while bank lending has yet to adequately support domestic production.

To help stabilize the national currency and support economic growth, the committee agreed to maintain the central bank's 7-day basic interest rate at 8 percent per year and continue implementing integrated monetary and foreign exchange management measures.

The central bank will also continue using monetary policy tools, including issuing the BOL bonds and managing exchange rates to curb inflation.

In addition, the BOL will coordinate with the Ministry of Finance and the Ministry of Industry and Commerce to review credit policies and promote lending for seasonal agricultural production, import substitution, and export-oriented businesses to further support economic growth.