Together we congratulate the Cambodian riel on its 39th anniversary. The riel is now widely used in the rural areas and to a lesser extent in the urban and tourist areas where the US dollar dominates.
As we know, the dollar became a popular currency during the period of the United Transitional Authority in Cambodia from 1990s and, since then, it remains the dominant currency representing 90 per cent of the assets of commercial banks as at end of 2018.
The well managed combination of an internationally trusted dollar and a young riel has supported tremendous investment in Cambodia which has led the country on a high and sustained growth path from one of the least developed countries in the world towards a lower middle income country today.
This market led and liberal monetary approach has resulted in a very stable exchange rate between the dollar and the riel which has fluctuated within a band width of around 1.5 per cent over the past 10 years.
This is a major accomplishment that contributed importantly to the monetary stability, the long term growth of the economy and the welfare of Cambodians.
This successful accomplishment is the result of a conscious and painstaking efforts of the National Bank of Cambodia’s authorities in collaboration with the Ministry of Economy and Finance.
Their strategic approaches have been set up in detail in the Financial Sector Development Strategy 2011-2020 which have been followed carefully.
The Governor of the National Bank of Cambodia, in his monetary policy leadership role, has mastered this market-led approach to encourage widespread public acceptance in favour of the riel by undertaking several sustainable actions including the establishment of the Liquidity Providing Collateralized Operation (LPCO).
The riel is the primary means of bank payment and settlement, the center of clearance for all foreign currencies settlement in the banking system and financial industry in Cambodia.
This market-led approach and well-targetted actions have led to an overall increase in the use of the riel, setting the conditions with the assurance of stable economic growth, moderate inflation rate and enduring stability of exchange rate for riel to the dollar.
I, President and Group Managing Director of ACLEDA Bank Plc., and in my capacity as the Chairman of the Association of Banks in Cambodia, firmly believe and always trust that it’s the right moment to have our riel fully play her role as the sovereign currency in all means of payment and settlement.
We support the valued initiative of the Government of Cambodia, the National Bank of Cambodia for the active role of riel as the central means of payments based on a market approach. All members of the Association of Banks in Cambodia support the long term and effective market-led approach of the National Bank to promote the riel.
We are always ready to support the National Bank in this long term market- led strategy of promoting the riel with our deep understanding of the market and our profound expertise working directly with the public at large on a daily basis.