Business leaders from the Lower Mekong region are urging their respective governments to use local currencies for trading in border regions instead of the US dollar, arguing that this would facilitate business transactions and reduce exchange costs, a Thai newspaper reported yesterday.
Sanan Angubolkul, president of the Thailand-Vietnam Business Council, said the use of local currencies for trade in border areas would benefit business operators in a number of ways, shortening the trade process while reducing the risks and costs of volatile exchange rates against the US dollar. This would result in more trade, he told the Bangkok Post.
He added that business leaders in Thailand and the Cambodia, Laos, Vietnam and Myanmar (CMLV) region were planning to propose the local currency plan to their governments yesterday during the 7th Ayeyawady-Chao Phraya-Mekong Economic Cooperation Strategy Summit (ACMECS-7) in Hanoi.
However, a Cambodian trade official who joined the ACMECS-7 meeting yesterday could not confirm that the proposal had been discussed.
“I did not hear anything regarding this plan,” said Sim Sokheng, director-general of international trade at the Ministry of Commerce.
Economist Chan Sophal said the acceptance of local currencies along border regions would facilitate both business and tourism. He said Cambodian traders were already accepting Thai, Vietnamese and Lao currencies in border areas, but the riel was not readily accepted outside the country.
“Our country is free and flexible in using foreign currencies, and we already accept various currencies near our borders,” he said. “But whether we can use our riel banknotes on their side of the border is a question.”
He said the use of riel currency in neighbouring countries would involve the “leaking of money” into these countries, which carries a slight monetary risk to the National Bank of Cambodia, but when spent the currency’s value would be recovered as products and services.