Business News
Lao central bank to issue new 100,000-kip notes
Jan 26, 2012, 6:07 GMT
Vientiane - The central bank of Laos will next month issue new 100,000-kip (12-dollar) banknotes to encourage people to use the national currency instead of US dollars and Thai baht, news reports said Thursday.
'With 100,000-kip banknotes, people won't need to carry so many notes around with them to pay for goods and services,' Currency Issuing Department Director General Souphat Khotnhotha told the Vientiane Times.
At present, many Lao prefer to use US dollars and Thai baht for expensive purchases because they are available in larger denominations, he said.
Currently the largest kip banknote is the 50,000-kip while the largest Thai banknote is 1,000 baht (32 dollars).
Souphat said the introduction of the 100,000-kip note would not increase the money supply, so it should not boost inflation.
He said that the new notes would stop traders hiking prices in the kip currency because of shortages of banknotes.
Central Bank officials blame the kip shortage on the Lao tradition of Buddhist merit-making ceremonies, which includes providing many small-denomination kip banknotes to monks.
The new 100,000-kip banknotes will be printed abroad to ensure against counterfeits, the state news report said.
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