On 2 August 2021, the Monetary Policy Department, Bank of Lao PDR ("BOL") issued Instruction No. 878/MPD on the Transferring Foreign Exchange Stores into a Representative of a Commercial Bank ("Instruction"). The Instruction supplements/implements Notice No.758/MPD dated 12 July 2021 on the Converting Foreign Exchange Stores Representative of a Commercial Bank. To comply with the laws and relevant regulations, BOL has issued various guidelines which cover, among other things, the following:
- Application to be a representative of a commercial bank. A foreign exchange store ("FX Store") shall coordinate with a commercial bank of its choice and apply to be a representative of such commercial bank ("Agent"). An FX Store can apply as an Agent with several commercial banks, but it can only sign a currency exchange agent agreement with one bank.
- Determining exchange rates and trading currencies. The exchange rate of the FX Stores shall be in accordance with Decision No.801/BOL dated 5 October 2015 on "Determining the reference exchange rate between the LAK and USD and Determining the exchange rate of commercial banks and FX Stores" and other legislations defined by BOL periodically.
- Operation of an FX Store after becoming an Agent. An FX Store has certain obligations after becoming an agent, including (i) putting up a signage bearing clearly the name of the commercial bank it represents; and (ii) complying with continuing obligations pursuant to relevant regulations.
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