The National Bank of Cambodia responded to rumours yesterday that local banks were no longer accepting US dollar banknotes with minor imperfections, such as small tears, creases or ink stamps, stating that the central bank had not changed its policies.
The clarification came after a post on social media went viral earlier this week, claiming that Cambodian banks were no longer accepting US dollar banknotes unless they were in mint condition. As more Cambodians commented and shared experiences online, it became increasingly confusing as to what banks were and were not accepting.
Hoping to clear up the confusion, the central bank responded by posting an undated copy of its regulations on the acceptance of US dollar and Cambodian riel banknotes on its Facebook page. But as the announcement was made without any explanation, it only appeared to heighten public anxiety, setting off a flurry of speculation and commentary.
Chea Serey, director-general of the National Bank of Cambodia (NBC), told the Post yesterday that while there had been no policy changes, the NBC had recently instructed banks to be on the lookout for ink-stained banknotes that could indicate they were stolen from ATM machines.
“ATMs have a technology in place whereby the moment the machine is opened using force, a special ink will spill over the notes make it easy for law enforcement officers to identify stolen banknotes,” she explained.
Serey suggested the confusion may have resulted from some bank staff being “overly careful” in accepting ink-stained banknotes. However, a simple, small ink stamp does not void the currency.
“I believe that the problem is compounded by Facebook users scaring each other, money changers and businessmen across the country,” she said.
Kim Sokneng, a money changer near Phsar Kabko in central Phnom Penh, said postings on social media sites claiming local banks were rejecting US dollar banknotes that appeared old or blemished were a cause for concern and she no longer accepts such banknotes.
“I don’t want to reject them, but I need to be careful because I am afraid [banks] will reject that money when I go to exchange it,” she said.
Some are claiming that banks have already done just that. Sok Heng, who runs a small business with her husband, said when she tried to deposit $5,000 into their account at ANZ Royal Bank last Friday the teller refused to accept $300 worth of US banknotes. She claims the bank returned the bills because they were an older issue, though they were readily accepted by another bank.
Serey pointed out that NBC is not responsible for the quality of US dollar banknotes in local circulation as it is only responsible for Cambodian riel banknotes, because it prints them and therefore must assure their quality.
She said that while the NBC would not use stringent administrative measures to promote use of the local currency, people who choose to use US dollars must be responsible for them.
“We have no obligation by law to facilitate the circulation of the US dollar or any other [foreign] currency in the country,” Serey said. “If there is a concern, then people should switch back to Khmer riel on their own accord.”
However, Chan Sophal, director at the Centre for Policy Studies, said the central bank should take every necessary action to quell the rumours and ensure banks accept old yet genuine US dollar banknotes given the exceptionally high dollarisation of the Cambodian economy.
“It affected the feeling of people who hold US dollar notes and can affect the cash flow in the economy,” he said.
Additional reporting by Cheng Sokhorng