The kip is the official currency of the Lao People’s Democratic Republic, a nation of Southeast Asia more commonly known as Laos. This decimal currency is subdivided into 100 att, but while att-denominated coins are in circulation, they are rarely used. The kip was first introduced in 1952 after the country gained independence from France. The currency is issued and maintained by the Bank of the Lao P.D.R.
The first kip to be used in Laos was the Indochinese kip in 1893. This kip was also used in two other French territories: Cambodia and Vietnam. Laos declared independence from France in 1945 and the first Lao kip was introduced, but it was devalued in 1947 when France reasserted its control over Laos. The country finally gained independence in 1952, and the kip was reintroduced on par with the French Indochinese kip, also known as the piastre. At its introduction, the new kip was also known as the royal kip.
A long period of turmoil directly related to the civil war occurring in Vietnam erupted in Laos from the time of its independence until 1975. The National Bank was highly unstable during this period, but when the Lao socialist party, the Pathet Lao, abolished the monarchy in 1975, the new government issued the Pathet Lao kip the following year to replace the royal kip at a rate of 1 Pathet Lao kip: 20 royal kip. This currency circulated for only three years before economic reforms were put in place that established the Bank of the Lao P.D.R. The Lao P.D.R. kip was introduced in 1979 at a rate of 1 new kip: 100 Pathet Lao kip.
The economy of Laos is dependent on trade with the country’s close neighbours: China, Vietnam and Thailand. Agriculture comprises the bulk of the industry of Laos, with subsistence farming accounting for 50 percent of the GDP and 80 percent of employment. Most of the agricultural land is used for rice, and Laos offers the greatest variety in types of rice in the region. Other industries include hydroelectricity, mining and tourism, but the country is still dependent on aid from the International Monetary Fund (IMF) and the Asian Development Bank (ADB) to develop them. Although the country has substantial mineral and coal deposits, the overall economy is hampered by the high emigration rate of skilled individuals.