PHNOM PENH POST, March 04 - 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.
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