Based on the narration of “The History and The Usage of Khmer Currency” in Post Supplements’ first Financial Quarterly Review, the habit of coin usage has been passed down from Khmer ancestors to the reign of King Ang Doung, who ruled Cambodia between 1848 and 1860 before the arrival of the French Protectorate of Cambodia in the middle of 1860.
In the beginning of the French Protectorate, Cambodians were still using metal coins until the French manufactured and printed currency notes for Indochina, comprising Cambodia, Laos, and Vietnam, signalling the beginning of Cambodia’s usage of the joint currency.
It would be a century-long wait before Cambodians could finally repossess its right to using its own separate national currency. This occurred after the Kingdom gained independence from France in 1953, and after the National Bank of Cambodia was founded.
What made Khmer people go from using their traditional metal coins to using currency notes?
Sambo Manara, a history professor at the Royal University of Phnom Penh and Pannasastra University of Cambodia, said that in the Ang Doung era, the government could still manage Cambodia’s economy despite the country’s vulnerability to attacks from neighbouring countries.
Manara continued to explain, “Concrete evidences include a region called ‘Pum Kleang Prak’ (coin warehouse village) in the capital of Odong that left behind a metal casting mold, from which researchers are subsequently concluding that the area was where the mint to make the coins was located. These coins were made of various types of metals.”
“It is known that some coins were made from valuable metals such as silver and gold, while neighbouring countries only used regular metals like zinc and copper,” he said.
When the French colonized Indochina, they were aware that Cambodia had the most valuable currency in the region because of the precious metals used.
Manara also explained that primarily, the French definitely wanted to procure the coins in order to turn them into other valuable items. Secondly, the French government was having a hard time managing the economy in the region because the three countries, despite being under the same colonization, followed their individual economy structures and currency. As such, the French had to find a formula that made the three countries use a joint currency.
“In this case, with or without our consent, they already wanted to take advantage of us by collecting our original currency,” Manara said.
“Third, when the new currency in the region was made, we had to trade our old currency with the new one. While this was convenient for spending or doing business locally or with the French, Cambodians also wanted to show off this modern way of trading based on the Western ideology because in that period, both the King and the people were trying to establish a good relationship with the West,” he went on.
Manara explained, “When the French first printed paper money in the Indochina region, they used the currency called ‘piastre’, and they included three currencies for each country; Riel for Cambodia, Dong for Vietnam and Kip for Laos.”
Back then, one piastre was the equivalent of one riel, one dong, and one kip.
“Therefore, the authority in each country in the Indochina region agreed on that.”
Manara also added that, “Valuing Western currency has been deeply ingrained into the Cambodian society since the protectorate of France, and has continued until today. Now, if we look at how the public spends in market places, we can see the popularity of the U.S dollar, a way for people to show off their overflowing wealth that overtakes the national Cambodian Riel.”
Agreeing with Manara’s observations, Seng Bunthouen, director of Royal University of Law and Economics, said that the evolution from metallic currency to international note currency has always been the sign of a prosperous economy since the end of World War I. Even though some countries still use coins, this is only practised within the respective countries.
Bunthouen said, “Using a note currency is convenient because it does not take up a lot of space, is lightweight and is easy for business trades.” He also added, “We can imagine how big our coin pouch has to be if we were like our ancestors who used regular “snoke”, “sleung” and “doung” coins – would we be able to carry as much money around with us?”
The evolution of currency is a rapid, ever-changing process “that includes the present, wherein for even more convenience and security, the world has started to use credit cards and ATM cards on top of currency notes,” said Bunthouen.
In regards to the birth of the Khmer Riel, both historians and economists conclude that Cambodia started to use the Riel exclusively after gaining independence from France in 1953.
Manara stated that, “The instance Cambodia gained independence from France, King Norodom Sihanouk’s government tried to establish a strong economy structure by printing currency notes from the National Bank of Cambodia for the first time in 1954.”
“After, that was the period where Cambodians revolutionized the Khmer Riel by themselves by proudly distributing and using this currency as widely as possible,” he noted.
“During the independence until the 1970s, Cambodians seemed to no longer give any value to the Western currency because our economy in that time had potential growth both locally and internationally. It was at that time that the world thought highly of Cambodia.”