Cambodia’s dollarisation peaks among neighbouring countries

Cambodia became Asia’s most dollarised economy, while dollarisation in neighbouring Lao P.D.R., Mongolia and Vietnam was either declining or broadly stable, a report by the International Monetary Fund (IMF) said a decade ago. Ten years later the grim reading remained unchanged compared to other economies in the region.

Since Cambodia’s economy has been substantially dollarised, there are a large amount of foreign currency deposits in the banking system, which is reflected in the ratio of foreign currency deposits to total deposits in all currencies or the ratio of foreign currency deposits to broad money — total money in circulation in the economy.

According to the Annual Report of NBC for 2022, the ratio of foreign currency deposits to broad money stood at 84.1 percent last year, which increased 1.1 percent compared to 83 percent in 2021, while Riel in circulation stayed at 7.7 percent compared to broad money, deposits and loans in Riel was 8.9 percent of total deposits and 11.2 percent of the total loan portfolio in Cambodia.

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