What is the Currency of Laos? A Guide to the Lao KipLaos, a landlocked country in Southeast Asia, is known for its natural beauty, rich culture, and unique history. When traveling or doing business in Laos, understanding the local currency is essential. The official currency of Laos is the Lao Kip. This topic will explore the Lao Kip, its history, how it is used in Laos, and practical tips for handling money in the country.
The Lao Kip (LAK) Laos’ Official Currency
The Lao Kip (LAK) is the official currency of Laos. It is abbreviated as LAK and is denoted by the symbol ₭. The Lao Kip is used for all transactions within the country, from everyday purchases to larger business deals. The currency is issued and regulated by the Bank of the Lao P.D.R., which ensures the stability and circulation of the Kip.
Key Facts About the Lao Kip
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Currency Name Lao Kip
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Currency Code LAK
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Currency Symbol ₭
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Subunit 1 Kip = 100 Att (although Att coins are no longer in circulation)
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Issued By Bank of the Lao P.D.R.
The Lao Kip has been in circulation since 1952, and its history is intertwined with the country’s political and economic developments. Over time, the currency has undergone changes to reflect Laos’ growing economy and development.
History of the Lao Kip
The Lao Kip was first introduced in 1952 as a replacement for the French Indochinese Piastre, which was used during the colonial period. The original Kip was subdivided into att (or cents), and its value was initially pegged to the French franc. However, the Kip went through a series of devaluations during the 1970s, particularly after the country became a communist state following the Laotian Civil War.
In the early 2000s, the Lao government began working on stabilizing the economy and introduced new banknotes to improve the functionality of the Kip. The government’s efforts to stabilize inflation and attract foreign investment have played a significant role in maintaining the currency’s value in recent years.
The Current State of the Lao Kip
Today, the Lao Kip is used for all domestic transactions, and it is accepted across Laos, including urban areas such as Vientiane, the capital, and more rural regions. While the Kip remains the official currency, the US Dollar (USD) and Thai Baht (THB) are often used in certain situations, especially in border areas or for larger transactions.
Banknotes and Coins in Circulation
The Lao Kip is available in both banknotes and coins. However, coins are not frequently used in everyday transactions, and their value is low compared to banknotes. The banknotes, on the other hand, are the primary medium of exchange.
The Bank of the Lao P.D.R. issues banknotes in the following denominations
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1,000 LAK
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5,000 LAK
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10,000 LAK
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20,000 LAK
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50,000 LAK
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100,000 LAK
These banknotes feature important cultural and historical figures, as well as national landmarks, which help to reflect Laos’ heritage and identity. Smaller denominations, like 500 LAK, are still in circulation but are not as commonly used.
Currency Exchange in Laos
Travelers and businesses looking to exchange currency for the Lao Kip can do so through a variety of channels. However, because the Lao Kip is not widely traded outside of Laos, it is important to plan ahead if you are bringing foreign currency into the country.
Exchanging Foreign Currency for Lao Kip
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Currency Exchange Offices Most major cities in Laos, including Vientiane and Luang Prabang, have currency exchange offices where foreign currencies can be exchanged for Lao Kip. Exchange rates may vary, so it’s important to check the current rates before making an exchange. Larger international airports in Laos, such as Wattay International Airport, also have currency exchange services.
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Banks Banks in Laos can also exchange foreign currencies into Lao Kip, although they may charge a commission for the service. For those seeking to exchange larger sums, it is advisable to use a bank rather than a currency exchange office to ensure better rates and security.
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ATMs ATMs are widely available in Laos, particularly in urban areas and tourist hotspots. Most ATMs accept international cards such as Visa and MasterCard. However, it’s important to be aware of ATM fees, which can add up. Additionally, not all ATMs in Laos dispense large denominations of the Lao Kip, so be mindful of withdrawal limits.
The Role of the Bank of the Lao P.D.R.
The Bank of the Lao P.D.R., also known as the Central Bank of Laos, is the institution responsible for issuing the Lao Kip and managing the country’s monetary policy. The bank regulates inflation, manages foreign exchange reserves, and ensures the stability of the national currency.
Inflation and Exchange Rates
The exchange rate of the Lao Kip can fluctuate depending on the country’s economic situation. In recent years, Laos has made strides to stabilize its currency, but inflation and fluctuations in the value of the Kip still occur. Due to its economic reliance on exports, including agriculture and hydropower, fluctuations in global commodity prices can directly impact the value of the Lao Kip.
International Use of the Lao Kip
While the Lao Kip is the official currency, US dollars and Thai baht are also widely accepted in certain areas of Laos. In border regions and larger cities, US dollars are commonly used for big-ticket items like hotel bills and travel expenses. However, for day-to-day purchases and transactions, Lao Kip remains the most widely used currency.
Practical Tips for Handling Money in Laos
Traveling to Laos can be a rewarding experience, but it’s important to understand how to handle money effectively. Here are some practical tips for managing your finances while in Laos
1. Carry Lao Kip for Local Purchases
While US dollars and Thai baht are accepted in some areas, it is always a good idea to have enough Lao Kip for smaller, local purchases such as food, transportation, and souvenirs. Many small businesses, street vendors, and rural areas do not accept foreign currencies.
2. Be Aware of Exchange Rates
Exchange rates for the Lao Kip can fluctuate. It’s advisable to monitor exchange rates before converting large sums of foreign currency. Compare rates between currency exchange offices and banks to find the best deal.
3. Use ATMs Wisely
ATMs are widely available in Laos, especially in larger cities and tourist areas. However, keep in mind that fees can vary, and some ATMs may have withdrawal limits. It’s a good idea to carry some cash with you in case you’re in an area without an ATM.
4. Keep Small Denominations for Tips and Small Purchases
Smaller denominations of Lao Kip, such as the 1,000 LAK and 5,000 LAK notes, are useful for tipping and making small payments. It’s a good idea to carry some smaller bills, especially in more rural or less developed areas.
The Lao Kip (LAK) is the official currency of Laos, and understanding its value, how to exchange it, and how it is used in everyday transactions is crucial for anyone visiting or doing business in the country. While Laos is making strides to stabilize its economy, the currency can still fluctuate, so it’s important to keep an eye on exchange rates and make informed financial decisions.
By familiarizing yourself with the Lao Kip and how it functions in Laos, you can ensure a smooth and enjoyable experience while traveling through this beautiful and culturally rich Southeast Asian nation. Whether you are exploring the ancient temples of Luang Prabang or enjoying the vibrant markets of Vientiane, the Lao Kip will be your primary means of transaction, helping you navigate the country with ease.