Logo of Phnom Penh Post newspaper Phnom Penh Post - Central bank allays dollar concerns

Central bank allays dollar concerns

A employee counts hundred dollar bills at a bank branch in Phnom Penh.
A employee counts hundred dollar bills at a bank branch in Phnom Penh. Heng Chivoan

Central bank allays dollar concerns

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

MOST VIEWED

  • Siem Reap drain canal now ‘mangrove’ promenade

    A more than half a kilometre long stretch of canal in Siem Reap has been covered and turned into a promenade to attract visitors, said Ly Rasmey, secretary of state at the Ministry of Land Management, Urban Planning and Construction, on September 16. The new pedestrianised

  • Angkor wildlife, aquarium park still to open October

    The Angkor Wildlife and Aquarium complex about 30km southeast of Siem Reap town with initial total investment of more than $70 million is reportedly still on track for an end-October opening. The park is located on a 100ha plot along National Road 6 in Kbon village, Khchas

  • Final verdicts for Khmer Rouge leaders ‘vital’ for next generation

    Nearly a decade after the commencement of Case 002/02 against Khieu Samphan back in 2014, the Extraordinary Chambers in the Courts of Cambodia (ECCC) is now set to deliver its final verdict for the former Khmer Rouge head of state. The Supreme Court Chamber of the ECCC,

  • Defence minister reaffirms Kingdom’s staunch support for One-China policy

    Minister of National Defence General Tea Banh has reaffirmed Cambodia’s unwavering support for the One-China policy. Tea Banh was speaking at the September 20 ceremonial handover of 117 vehicles and other military equipment donated by China’s defence ministry, held at Phnom Chumreay International Military Training

  • Deaths due to ‘lifestyle’ diseases rise in Kingdom

    The Ministry of Health has called on people to pay closer attention to their health to protect themselves from non-communicable diseases (NCDs) which it said have caused high rates of deaths in the country. Ministry secretary of state York Sambath made the call at a

  • Textile industry minimum wage now $200

    The official minimum wage for workers in textile-related sectors including garment, footwear, and travel goods for 2023 was pegged at $198, with Prime Minister Hun Sen stepping in to add $2 to the total, making it $200 per month. The Ministry of Labour and Vocational Training made the announcement