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The Study of Monetary Policy Instruments and Implementation Challenge in Laos

Author

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  • Maliny Sourigna
  • Shuzhen Zhu
  • Atsara Chanthavieng

Abstract

The monetary policies have been developed and implemented by the Bank of Lao PDR (BOL). This article presents the monetary policy framework in Laos which includes the policy instruments and implementation mechanism. The author applied the actual implementation and the existing theories to display the Lao monetary tools such as interest rate, open market operation, reserve ratio, exchange rate, credit control, cash flow management and relevant regulations. As well as the policy implementation mechanism has been presented in policy decision, operation department and operation mechanism. The author applies the descriptive analysis on the monetary policy implementation challenge and addressing. They based on monetary policy theories, literature studied, and practical experience from the operation authority. The analysis has found the challenges as The limited of market operation; the dollarization and multiples currencies consumer preference; the challenge in Kip prices, and Kip lending; the foreign capital outflow. Then, the analysis moved forward to the challenge addressing. All of these measures are taken to maintain the efficient management of the monetary system, ensure an effectiveness of the monetary policy implementation in the long-term.

Suggested Citation

  • Maliny Sourigna & Shuzhen Zhu & Atsara Chanthavieng, 2018. "The Study of Monetary Policy Instruments and Implementation Challenge in Laos," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 10(2), pages 169-178, February.
    • Handle: RePEc:ibn:ijefaa:v:10:y:2018:i:2:p:169-178
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    References listed on IDEAS

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    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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