AS trade activity between Cambodia and China intensifies, banks are seeing an increase in deals transacted in yuan.
Operating in Cambodia since 2010, Bank of China’s Phnom Penh branch has been trying to promote business transactions in yuan and has seen a significant increase in its use to pay for imports and exports over the past six months.
Chen Chang Jiang, chief executive officer at the branch, told the Post the amount of yuan received by the Bank of China reached almost $163 million from January to June this year, up 50 percent from the first half of last year.
“The growth is fast, and we are very happy,” Chen said. “It is the result of increasing exports and imports among businesses in Cambodia and China.”
Several other banks, such as Acleda, ANZ Royal, Cambodia Public Bank, Union Commercial Bank and Maruhan Japan Bank, also advertise yuan payment settlement services in Cambodia.
In Channy, president and CEO of Acleda Bank, said he has also seen more trade settlement in the currency, a lot of which he attributes to agricultural exports.
“There is a big jump of Cambodian rice flowing to China, and I believe that the trend of using Chinese yuan will be moving forward in Cambodia,” Channy said.
According to official data, of the 146,854 tonnes of rice Cambodia exported in the first five months of this year, 12,687 tonnes, or 8.6 per cent, went to China. Governments of both countries are aiming for trade volumes to reach $5 billion by 2017.
Recent figure from the Chinese embassy in Cambodia show trade between the two countries was valued at $1.79 billion in the first four months this year, a 42 per cent increase compared to the same period last year.
Nguon Sokha, director general of the National Bank of Cambodia, agrees that deals transacted in Chinese currency will increase, but she says the US dollar is still the dominant international currency.
“Currently, the yuan can only be used for international trade between Cambodia and China,” Sokha said. “The currency is still far behind the dollar, which represent at least 80 per cent of the Cambodian economy.”