Logo of Phnom Penh Post newspaper Phnom Penh Post - Expats, firms asked to use riel

Expats, firms asked to use riel

Expats, firms asked to use riel

DOMESTIC businesses and expatriates ought to make increased use of the riel according to National Bank of Cambodia Deputy Governor Neav Chanthana, who joined economists and students at a currency conference in Phnom Penh yesterday.

While Cambodians predominantly use the riel in daily transactions, according to the NBC, statistics show that over 90 percent of the value of domestic transactions is conducted in dollars.

“What we need from the private sector is to move to the local currency,” said Neav Chanthana at the Royal University of Law and Economics yesterday, reiterating the call to the expat community.

“People are confident in the local currency,”

She stated that the high level of dollarisation in the Kingdom restricted some of the policy options open to the NBC. “The economy is dollarised, so our role as lender of last resort is limited,” she said.

ACLEDA Bank Vice Chairman John Brinsden said that increased use of the riel would allow the central bank to have greater control over its monetary policy, such as the ability to control money supply and set interest rates. 

According to officials, NBC has implemented measures – often behind the scenes – aimed at boosting confidence in the riel.

Government wages and taxes must be paid in local currency, said Neav Chanthana, while highlighting the role the NBC plays exchanging money for microfinance institutions who receive funding in dollars and make loans in riel.

John Brinsden said the NBC appeared to be pursuing a gradual change to the riel, which he said he supported.

“Over the long term, dedollarise and use our own currency – but let’s not rush into it,” he said, adding that support of businesses for using the local currency varied on a case by case basis.

The riel was prevalent in rural areas, meaning it made sense for businesses operating in such areas to use the local currency. However, he said business with overseas, dollar-denominated contracts would likely support continued use of the greenback, as it removed any exchange risk that came with using multiple currencies.

“Dollars remain dominant for income of private employees and bank account savings,” added Jean-Jacques Paul, project manager of French Cooperation to the Royal University of Law and Economics.

NBC Deputy Director of Research Khou Vouty said a survey conducted late last year indicated 37 percent of Cambodians receive income in riel, 27.5 percent in dollars, and 33 percent in multiple currencies.
Some 2.2 percent of Cambodians received baht, while 0.3 percent received the Vietnamese dong.

“Cambodia has had monetary plurality for a long time, but we’re not a unique country in this case,” he said.

MOST VIEWED

  • Would you like fries with that? US burger chain makes Phnom Penh debut

    California-based The Habit Burger Grill restaurant chain is all set to serve up a delicious array of charbroiled burgers and sides at its newest international location in the centre of Phnom Penh. The Habit is “renowned for its award-winning Charburgers grilled over an open flame,

  • Banteay Meanchey flood victims receive aid

    Prime Minister Hun Sen on Wednesday provided aid to more than 10,000 families affected by flooding in Banteay Meanchey province’s Mongkol Borei district and offered his condolences to the 18 victims who drowned in the province over the past week. He said flooding had occured in

  • PM urges caution as Polish man tests positive for Covid

    The Ministry of Health on Wednesday reported that a 47-year-old Polish man tested positive for Covid-19 after arriving in Cambodia on Monday. There are a total of six Covid-19 patients currently in the country, all of whom are being treated at the Khmer-Soviet Friendship Hospital

  • Banteay Meanchey floods kill one more as death toll reaches 15

    As floodwaters start to recede in Pursat, Battambang and Pailin provinces and Phnom Penh, Banteay Meanchey continues to bear the brunt as one more person was killed on Monday, bringing the total number of flood-related deaths to 15 in the province this month. Banteay Meanchey provincial

  • Serving coffee with a side of robots

    The eye-catching glass building surrounded by greenery at the intersection of Streets 371 and 2002 in Phnom Penh’s Sen Sok district is more than just another coffee shop where you can while away a few hours. UrHobby House cafe is filled with robots and characters from

  • Floods prompt evacuations in Kampong Speu

    Rain-induced floods and water flowing from Kampong Speu province have submerged the houses of 1,527 families living close to the Prek Thnot River in Spean Thma, Tien, Kong Noy and Roluos communes in Phnom Penh’s Dangkor district, according to data from local authorities. Spean Thma