A. Bond Operation in Lao PDR
1. Primary Market
In the primary market, there are three types of method of operation of T-bills and BOL
bonds: interest value, auction value, and over the counter. Bond interest calculations
are classified into two types: discount and coupon.
2. Secondary Market
Trading in the secondary market is done through 14 days of repurchase agreement,
discount or outright agreement, and collateralised lending.
B. Inter-bank Market
An inter-bank market has played an important role recently in the development of
the financial market, compared with the last 10 years when trading was only between
commercial banks and the BOL. BOL occasionally provides liquidity for commercial
banks that hold T-bills through: 1) repurchase agreement (repo), 2) discount, and 3)
collateralised lending. BOL started such operations by practicing. There is no written
notice or announcement that notifies BOL’s T-bill operations to the banks.
1. Repurchase Agreement
BOL and a commercial bank sign an agreement that BOL purchases T-bills from
the commercial bank, and the commercial bank repurchases the T-bills from BOL
after 14 days. The agreement follows the same format for any commercial bank.
2. Discount
Discount is an operation wherein BOL purchases T-bills from a commercial bank
without a repurchase agreement. BOL may hold the T-bills until its maturity or re-sell
it to another commercial bank.
3. Collateralised Lending
BOL may grant loans to account holders against the security of valuable documents
A. Bond Operation in Lao PDR
1. Primary Market
In the primary market, there are three types of method of operation of T-bills and BOL
bonds: interest value, auction value, and over the counter. Bond interest calculations
are classified into two types: discount and coupon.
2. Secondary Market
Trading in the secondary market is done through 14 days of repurchase agreement,
discount or outright agreement, and collateralised lending.
B. Inter-bank Market
An inter-bank market has played an important role recently in the development of
the financial market, compared with the last 10 years when trading was only between
commercial banks and the BOL. BOL occasionally provides liquidity for commercial
banks that hold T-bills through: 1) repurchase agreement (repo), 2) discount, and 3)
collateralised lending. BOL started such operations by practicing. There is no written
notice or announcement that notifies BOL’s T-bill operations to the banks.
1. Repurchase Agreement
BOL and a commercial bank sign an agreement that BOL purchases T-bills from
the commercial bank, and the commercial bank repurchases the T-bills from BOL
after 14 days. The agreement follows the same format for any commercial bank.
2. Discount
Discount is an operation wherein BOL purchases T-bills from a commercial bank
without a repurchase agreement. BOL may hold the T-bills until its maturity or re-sell
it to another commercial bank.
3. Collateralised Lending
BOL may grant loans to account holders against the security of valuable documents
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