Search form

Login - Register | FOLLOW US ON

Logo of Phnom Penh Post newspaper Phnom Penh Post - ANZ chief says Cambodia should de-dollarise

ANZ chief says Cambodia should de-dollarise

ANZ chief executive Mike Smith says Cambodia should decouple the riel from the US dollar to a stand-alone currency and align itself to the Chinese renminbi (RMB), given the shift in global trade flows.

At the Cambodia Outlook Conference in Phnom Penh yesterday, Smith said: “I believe you have to think very seriously about linking your currency to somebody else’s currency, because you don’t control the printing press and that will always give you trouble in times of either tight or excessive liquidity, as we have now.

“The issue for Cambodia is to work through what it needs to do over the medium and long term, but be aware that with the trade and investment flows being more China- and Asia-biased, the currency to align to in the future is probably more likely to be the RMB than the US dollar.”

But Business Research Institute for Cambodia chief executive Hiroshi Suzuki said although Chinese companies had already begun exporting in RMB with incentives from the Chinese government, he expected the US dollar to remain the dominant currency in the short term.

“The use of the dollar is dominant in trade between Cambodia and other countries,” Suzuki said.“Transacting in RMB is a disadvantage for Cambodian companies because they face exchange-rate fluctuations.”

Suzuki said outside of the US dollar, the riel should not be pegged to any single currency.

“If Cambodia has success in de-dollarisation to some extent, the riel should be pegged to the basket of major currencies or international organisation currency,” he said, adding that the riel should not be linked or pegged to any single foreign currency, but the US dollar.

“During the highly dollarised period in Cambodia, the stable exchange rate between riel and the dollar is very important for stable macro-economic management of Cambodia.”

To contact the reporters on this story: Daniel de Carteret at daniel.decarteret@phnompenhpost.com
May Kunmakara at kunmakara.may@phnompenhpost.com

0

Comments

Please, login or register to post a comment

Latest Video

Google Angkor

Google's 3D Angkor online

Drawing on over one million photos, Google has taken the Angkor Wat temple complex into the digital realm, allowing anyone with internet access to enjoy 360-degree panoramic views of 100 of the ancient temples.

97' grenade attack commemoration

Back in the streets

Thousands of CNRP supporters march through Phnom Penh