Cambodia Pushes for Riel Adoption to Reduce Dollar Dependence

[geovalin]

KT/Chor Sukuntea

 

The National Bank of Cambodia (NBC) is intensifying efforts to promote the Cambodian riel (KHR) and reduce reliance on the US dollar, aiming to strengthen the country’s monetary sovereignty. While the dollar has dominated Cambodia’s economy since the 1990s, NBC is working to shift towards a more self-sufficient financial system through policy incentives, digital innovation, and financial education.

 

To encourage riel usage, NBC has launched financial literacy programs in schools, introduced reserve requirements favouring riel deposits, and mandated pricing of goods and services in the local currency. Businesses and government employees are also increasingly required to receive salaries in riel, ensuring its steady circulation.

 

Another key initiative is the development of an interbank market to facilitate riel transactions among financial institutions. NBC’s liquidity-providing collateralised operations (LPCO) in riel enable banks to access funds more easily, making the currency more attractive. Additionally, interest rate stability remains a priority, with NBC maintaining competitive rates on riel deposits and loans to build confidence among borrowers and savers.

 

A major breakthrough in digital transactions is the Bakong payment system, a blockchain-based platform developed by NBC. By integrating banks and mobile wallets, Bakong enables seamless riel transactions and promotes financial inclusion. It also connects Cambodia to regional payment networks, facilitating cross-border transactions in riel.

 

The government has further reinforced the riel’s role by issuing riel-denominated bonds, providing a secure investment avenue and strengthening financial markets. Despite these measures, full de-dollarisation remains challenging due to strong public trust in the US dollar, its historical stability, and its dominance in foreign trade and large business transactions.

 

NBC continues to intervene in the foreign exchange market to stabilise the riel against the dollar while introducing market-based monetary policies to maintain price stability. However, external factors such as global interest rate trends and Cambodia’s reliance on external financing present ongoing challenges.

 

At an annual conference in February, NBC Governor Chea Serey reaffirmed the banking sector’s resilience, citing strong deposit growth and high liquidity levels. She highlighted the modernisation of Cambodia’s payment systems and the growing adoption of digital transactions as key drivers in promoting the riel.

 

Financial experts agree that increasing riel usage is crucial for Cambodia’s economic stability. Economist Hong Vannak emphasised that greater reliance on the riel would protect the country from exchange rate fluctuations and inflation while strengthening investor confidence and public trust in the financial system.

 

While full de-dollarisation will take time, NBC’s strategic policies are gradually shifting Cambodia towards a more independent and resilient economy. By embracing the riel, businesses, financial institutions, and the public can collectively contribute to a stronger financial future for Cambodia.

 

-2025-03-21

 

[Woke to Sounds]

This is great news and another reason why Cambo looks more attractive as time goes by.

 

Ironically, some Western economies like Canada and Australia are being decimated by the Globalists who have no problem devaluing those currencies. (Hint: Net Zero)