Lao kip establishment of the Lao People's Democratic Republic. Kaysone Phomvihane is pictured on the obverse of the 2,000, 5,000, 10,000, 20,000, 50,000, and 100,000 kip banknotes. The Bank of Laos governor announced on January 25, 2012 that the Bank of Laos would issue 100,000 Kip banknotes as a regular issue on February 1, 2012 (but dated 2011) to encourage Lao people to use the national currency instead of U.S. dollars and Thai baht. Lao kip The kip (; code: LAK; sign: ₭ or ₭N; ; officially: ເງີນກີບລາວ, lit. "currency Lao kip") is the currency of Laos since 1952. Historically, one kip
Currency substitution displaced by a stable currency. At the beginning of this process, the store-of-value function of the domestic currency is replaced by the foreign currency. Then, the unit-of-account function of the domestic currency is displaced when many prices are quoted in a foreign currency. A prolonged period of high inflation will induce the domestic currency to lose its function as medium of exchange when the public carries out many transactions in foreign currency. Ize and Levy-Yeyati (1998) examine the determinants of deposit and credit currency substitution, concluding that currency substitution is driven by the volatility of inflation and the real exchange