THE government said yesterday it was close to making a decision on which currency will be used for trading on the Cambodia Stock Exchange (CSX), but experts remain divided on which would be the best option.
Ming Bankosal, Director General of Securities and Exchange Commission of Cambodia, said the exchange would make the final decision following some further public consultation next month.
“We are still studying it because we want to understand the impact it will have on the economy if we use just our currency or just the foreign currency [US dollars] or both of them,” he said.
In Channy, president and CEO of Acleda bank which is also a licensed broker for the exchange, said he welcomed whatever decision the government made but preferred using the local currency.
“We are operators; we always comply with the government’s decision. However, for us we prefer using riel over a foreign currency,” he said.
“If we use our currency, we can have our monetary authority act whenever it fluctuates – we have enough power to stabilise it. But, if we use a foreign currency, we don’t have monetary authority. We just rely on [the foreign] monetary policy.”
Lee Hyung Joon, Deputy Manager of the South Korean exchange’s trading board KOSDAQ, told the Post in Seoul last week the exchange’s view was “one stock, one price”.
“It can be possible to use US dollars in the stock market once US dollars are denominated in your economy – I think it does not pose any problem,” he said. “But if you accept two prices [using two currencies], the prices can fluctuate or change more. It is very hard to control.”