Laotian kip is the currency of Laos

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

If you want to know what is the currency in Laos, then our article will help you figure it out. In this state, the official currency is the local kip. Lao kip includes 100 at. This currency was put into circulation instead of the Indochinese piastres in 1955. The exchange of old banknotes for new banknotes was carried out at a ratio of 1 to 1. In the international currency designation, the currency of Laos has the code LAK. In addition, the symbol ₭ or K is used for it.

History of the monetary units of Laos

The piastre preceding the quip was introduced into circulation in France's Indochinese colonies in 1878. The issue of currency was handled by the private Bank of Indochina. At first, the piastre was equal to the Mexican peso. It included 24.4935 g of pure silver. However, in the summer of 1895, the content of this metal in the monetary unit decreased and began to amount to 24.3 g.

After 35 years, the gold content of the Indochinese piastre was found to be 0.5895 grams of gold. But a year later, in 1936, it was liquidated.

After the occupation of French Indochina by Japan, the piastre continued to be the official local unit. Its exchange rate against the Japanese yen was set atlevel approximately equal to 1 to 1. However, after the end of World War II, at the end of 1945, the piastre quotes were again attached to the French franc at a ratio of 1 to 17. In May 1953, the ratio changed and was already 1:10.

Introduction of own national currency

On the eve of the new year 1955, an agreement was concluded in Paris, France, which terminated the existence of the Indochinese States Emission Bank. These included Cambodia, Laos and Vietnam. The assets and liabilities of the financial institution were divided among the new national treasuries. The currency of Laos and its issue fell under the responsibility of the established National Bank of the State.

In 1976, a revolution won in the country. The consequence of those events was the denomination to which the currency of Laos was subjected. The exchange rate of old banknotes for new banknotes was 20 to 1. Nevertheless, the rapidly continuing rise in inflation led to the need to carry out a new denomination after 3 years.

This time old banknotes were exchanged for new banknotes at a ratio of 100 to 1. In 1980, metal coins with denominations of 10, 20 and 50 atm. But, due to the further devaluation of the national currency, they practically do not participate in trade and payment transactions. Paper bills are used primarily to exchange for US dollars.

Banknotes of the Laotian kip

Today, the currency of Laos is in circulation in denominationsin one, five, ten, fifty, one hundred and five hundred kip. In addition, high levels of inflation and devaluation led to the need to issue banknotes of higher denominations. Therefore, banknotes of one thousand, two thousand, five thousand, ten thousand, twenty thousand, fifty thousand and one hundred thousand bales are used in circulation, trade and payment transactions.

Design of Laotian banknotes

The currency of Laos in small denominations on its front side contains the image of a peasant with a plow, working in rice fields, shepherds and a tank of the armed forces. The obverse of the larger denomination bales bears the image of the founder of the Lao People's Democratic Republic, Kayson Phomvihan. On the reverse of all banknotes, the government building is depicted, as well as various situations from the life of the peoples of the state of Laos.

All Laotian kip banknotes are protected against forgery in the form of a watermark consisting of a portrait of Kayson Phomvihan. In addition, the structure of banknotes uses a special security thread that runs from right to left across the entire width of the bill.

Features of using and exchanging kip in Laos

It should be noted that the Lao kip is the only official currency in this country. Nevertheless, on the territory of the state, not only the national currency of Laos, but also American dollars and Thai baht take part in circulation. The kip is mainly used for small purchases.

Banks in Laos are open all weekdays: from Monday to Friday. Offices open at 8 am. From 12 noon to 13:30 lunch break. Banks are then open from 13:30 to 17:30 pm.

Currency in Laos is subject to exchange not only in banking institutions. Banknotes can be converted at local exchange offices. True, at these points the exchange rate of the Lao kip against other currencies may differ slightly from the official one.

You can also exchange money at the airport. It should be noted that many local banks only work with US dollars or Thai baht, so it is not possible to get kip in them. It should be emphasized that it is often more profitable to change dollars and baht for bales at exchange offices than on the street at merchants. The most acceptable exchange rate can be found in exchange offices operating in the markets of cities and on the territory of shopping areas. True, the risk of becoming a victim of fraudsters is much higher here.

Paying with credit cards and travelers checks

Large banks of the country work with plastic cards of the world's major payment systems. Traveler's checks can only be exchanged for cash at the offices of international banking institutions in Laos. To avoid unnecessary costs caused by fluctuations in the exchange rate, it is advisable to bring travelers checks here in US dollars or Thai baht. The kip is not a freely convertible currency, so it is unlikely to be exchanged for other banknotes outside of Laos.