Cambodian riel proves stable throughout 2011

http://www.phnompenhpost.com/index.php/2012010553793/Business/cambodian-riel-proves-stable-throughout-2011.html

May Kunmakara
Thursday, 05 January 2012

Cambodia's currency, the Khmer riel, held its ground versus the US dollar in 2011, staying virtually unchanged year-on-year.

One greenback bought 4,057 riel at the end of last year, a decrease of just 0.05 per cent from the 4,055 riel a dollar bought at the end of 2010, according to the Ministry of Commerce.

National Bank of Cambodia director-general and spokeswoman Nguon Sokha claimed the riel offered much less volatility than other regional currencies.

“It proves there is more confidence in using more Khmer riel in the economy,” she said.

Business Research Institute for Cambodia CEO and chief economist Hiroshi Suzuki said: “The stability of the exchange rate is fundamental for a developing country that wants to invite foreign direct and indirect investment.”

The NBC’s policy is to keep the riel between 4,000 and 4,100 riel to the dollar, according to Nguon Sokha.

Experts, however, have highlighted the limited tools available to the NBC, given the Kingdom’s highly dollarised economy.

^^ But the US Dollar is unstable. Maybe time to fix it to RMB.

Just curious to know the composition of reserves in Hard currency for Cambodian Riel other than the familiar US Dollars, Japanese Yen and EU Euro

do you guys think that the CSX trading in the Riel is the right choice

do you guys think that the CSX trading in the Riel is the right choice

The riels and USD is relatively stable, so I think it doesn't matter.

It doesn't see much impact to the shareholders for now

hey guys what about a currency for Cambodia, Laos and Vietnam named Indochina dollar or soemthing like that?

hey guys what about a currency for Cambodia, Laos and Vietnam named Indochina dollar or soemthing like that?

I'd not like that because it reminds me of the policy of Vietnam colonizing Indochina, whose official language is Vietnamese and currency is Dong. Not sure if it is still its on going behind the scene policy, but you never know.

But, what I'd hope is that all ASEAN countries use the same currency called ASEAN dollar or something

Looking at the mess of Euro now, is a combine currency really a good thing, if one country stuffed up, it affected everyone.

Looking at the mess of Euro now, is a combine currency really a good thing, if one country stuffed up, it affected everyone.

Yes but the Euro is unstable now many Countries in Europe have many owe's and going to be bankrupt like Greece , Portugal or Spain.

hey guys what about a currency for Cambodia, Laos and Vietnam named Indochina dollar or soemthing like that?

You are referring the revival of French Indochinese piastre (http://en.wikipedia.org/wiki/French_Indochinese_piastre) just like this example:

http://upload.wikimedia.org/wikipedia/en/d/df/French_Indochina_100_Piastres.png

But, what I'd hope is that all ASEAN countries use the same currency called ASEAN dollar or something

Unlikely at the time being since they have seen the Euro mess which strongly discourage the national bank governors from implement such money ... ONLY allow the capital flow by allowing the reciprocal establishment of the bank branches to facilitate the capital movements will be fine.

Just wonder about the way of exchange rate calculation for the case of Riel - for the case of Lao Kip - 70% on US Dollars and 30% on Thai Baht even though Chinese Yuan is going to fill some part of US Dollars very soon.

this currency aint going to do good if everyones keeps spending $US in cambodia

Cambodia's riel stabilises against dollar
http://www.phnompenhpost.com/index.php/2012081557985/Business/cambodias-riel-stabilises-against-dollar.html

["The stabilisation of the riel over the first half of this year is a reflection of increased confidence in using riel in the economy as well as improvements in the agricultural sector, according to economists and the National Bank of Cambodia (NBC).

The slowdown in the US economy has led to the depreciation of the dollar against other currencies, which has also been a contributor to the appreciation of the riel this year.

The global economy is expecting to grow by 3.5 per cent this year, down from 3.9 per cent last year.

The European economy is projected to contract compared to non-EU states, while the US’s economy is expected to grow by 2.1 per cent.

At the same time, Cambodia’s projected growth is about seven per cent this year and the inflation rate stands around five per cent.

According to daily data from the Ministry of Commerce, the riel appreciated 0.36 per cent as of the end of June to 4,112 riel against the greenback, compared to last June’s value of 4,127.

NBC governor Chea Chanto said during the first semester meeting that the government was trying to stabilise the exchange rate between the riel and the dollar in order to maintain stable consumer prices.

The riel’s stabilisation reflected its increasing use in the economy and the public’s confidence, Khin Pisey, senior researcher for the Economic Institute of Cambodia, said.

“This proved that circulation of the riel increased throughout the economy and its growth rate is also much more than previously. However, at the same time, the circulation of American dollars increased significantly – I mean it was running along together with the riel, because our economy is expanding,” Pisey said.

“The main factor fomenting the increasing in use of the riel is the improvements in the agricultural sector. Our farmers buy in and out with riel.”

Pisey added that the establishment of the Cambodia Securities Exchange also played a part in promoting use of the local currency.

“At 0.3 per cent appreciation, the riel is very stable. I suppose this is because of the central bank making a huge effort to stabilise the exchange rate between the dollar and the riel,” Hiroshi Suzuki, chief economist for the Business Research Institute for Cambodia (BRIC) said.

“Of course, Cambodia’s economy is highly dollarised, so the stabilisation of the exchange rate is indispensable to promoting the use of the local currency. So the exchange rate has been very stable – this could prove to be a good reason for using the riel,” he added.

However, if the riel were to depreciate against the dollar, the price of imports would increase, Suzuki said.

“Stabilising the exchange rate is very important in stabilising the consumer price index as well.”

The majority of Cambodians predominantly use riel, but the NBC’s statistics show that more than 90 per cent of transactions in Cambodia are conducted in dollars.

An NBC survey showed the riel was the currency of choice for most people, but experts said the dollar was the main currency for conducting business in Cambodia.

According to the NBC’s survey, conducted in 2010, 37 per cent of Cambodians received their income in riel, 27.5 per cent in dollars and 33 per cent in both or multiple currencies. About 2.2 per cent of Cambodians used Thai baht, while a further 0.3 per cent used the Vietnamese dong.

The survey also revealed that the currency of choice varied depending on location. About 70 per cent of Phnom Penh respondents operated solely in dollars, but only six per cent of respondents from Battambang did likewise.

Hiroshi Suzuki said the Cambodian government was trying to promote the use of the riel, but the government would like to do it over the longer term.

“If we would like to make use of the riel more in the short term, it will create a very big shock to the economy. So to be stable and steady during this phase is very important," he said. “I have no idea how much to use the riel in the short term. Of course, we have many methods for its increased use in the long term.""]

this currency aint going to do good if everyones keeps spending $US in cambodia

The government is doing its best and insist all government services is paid by riels.

And actually, I am not sure if everyone wants to spend USD, majority of farmers still prefer their payment in riels, if we visit markets in the country side, all you see is 100r, 500r, 1000r, I have been told they don't even want 10,000r notes.

Cambodia's riel stabilises against dollar
http://www.phnompenhpost.com/index.php/2012081557985/Business/cambodias-riel-stabilises-against-dollar.html

"The stabilisation of the riel over the first half of this year is a reflection of increased confidence in using riel in the economy as well as improvements in the agricultural sector, according to economists and the National Bank of Cambodia (NBC).

The slowdown in the US economy has led to the depreciation of the dollar against other currencies, which has also been a contributor to the appreciation of the riel this year.

The global economy is expecting to grow by 3.5 per cent this year, down from 3.9 per cent last year.

The European economy is projected to contract compared to non-EU states, while the US’s economy is expected to grow by 2.1 per cent.

At the same time, Cambodia’s projected growth is about seven per cent this year and the inflation rate stands around five per cent.

According to daily data from the Ministry of Commerce, the riel appreciated 0.36 per cent as of the end of June to 4,112 riel against the greenback, compared to last June’s value of 4,127.

NBC governor Chea Chanto said during the first semester meeting that the government was trying to stabilise the exchange rate between the riel and the dollar in order to maintain stable consumer prices.

The riel’s stabilisation reflected its increasing use in the economy and the public’s confidence, Khin Pisey, senior researcher for the Economic Institute of Cambodia, said.

“This proved that circulation of the riel increased throughout the economy and its growth rate is also much more than previously. However, at the same time, the circulation of American dollars increased significantly – I mean it was running along together with the riel, because our economy is expanding,” Pisey said.

“The main factor fomenting the increasing in use of the riel is the improvements in the agricultural sector. Our farmers buy in and out with riel.”

Pisey added that the establishment of the Cambodia Securities Exchange also played a part in promoting use of the local currency.

“At 0.3 per cent appreciation, the riel is very stable. I suppose this is because of the central bank making a huge effort to stabilise the exchange rate between the dollar and the riel,” Hiroshi Suzuki, chief economist for the Business Research Institute for Cambodia (BRIC) said.

“Of course, Cambodia’s economy is highly dollarised, so the stabilisation of the exchange rate is indispensable to promoting the use of the local currency. So the exchange rate has been very stable – this could prove to be a good reason for using the riel,” he added.

However, if the riel were to depreciate against the dollar, the price of imports would increase, Suzuki said.

“Stabilising the exchange rate is very important in stabilising the consumer price index as well.”

The majority of Cambodians predominantly use riel, but the NBC’s statistics show that more than 90 per cent of transactions in Cambodia are conducted in dollars.

An NBC survey showed the riel was the currency of choice for most people, but experts said the dollar was the main currency for conducting business in Cambodia.

According to the NBC’s survey, conducted in 2010, 37 per cent of Cambodians received their income in riel, 27.5 per cent in dollars and 33 per cent in both or multiple currencies. About 2.2 per cent of Cambodians used Thai baht, while a further 0.3 per cent used the Vietnamese dong.

The survey also revealed that the currency of choice varied depending on location. About 70 per cent of Phnom Penh respondents operated solely in dollars, but only six per cent of respondents from Battambang did likewise.

Hiroshi Suzuki said the Cambodian government was trying to promote the use of the riel, but the government would like to do it over the longer term.

“If we would like to make use of the riel more in the short term, it will create a very big shock to the economy. So to be stable and steady during this phase is very important," he said. “I have no idea how much to use the riel in the short term. Of course, we have many methods for its increased use in the long term.""

Could the dollar bill be on its way out?

http://mcalesternews.com/offbeatnews/x1332342890/Could-the-dollar-bill-be-on-its-way-out

Throughout the last couple of decades, the Government Accountability Office (GAO) has been trying to get rid of the paper dollar and replace it with a coin; in several reports, the U.S. agency has indicated getting rid of the paper dollar would ultimately save the country a significant amount of money.

But many Americans don’t see it that way, as past surveys indicate that people prefer using dollar bills. Dollar coins seem to be used far less and wind up collecting dust on top of a dresser or being thrown into an empty bottle, never to be used again.

As a result, the U.S. Treasury stopped production of dollar coins in 2011.

Is Cambodia ready for US$1 coins?

I don't understand why we don't have coins, for the 100, 500, 1000 riels, these exchange hand so many times during the day it wears out very fast, those should be replace with coins.

Is Cambodia ready for US$1 coins?

I don't understand why we don't have coins, for the 100, 500, 1000 riels, these exchange hand so many times during the day it wears out very fast, those should be replace with coins.

Cambodia used to have in the 1990s but it was too expensive to make and people didnt really like to use it so they stopped making it.

Cambodia's coins from 1994
http://0.tqn.com/d/coins/1/0/u/2/-/-/Cambodia_money_coins.jpg

Cambodia used to have in the 1990s but it was too expensive to make and people didnt really like to use it so they stopped making it.

Cambodia's coins from 1994
http://0.tqn.com/d/coins/1/0/u/2/-/-/Cambodia_money_coins.jpg

Time to reconsider, coins last longer, it may cost more to produce initially, but last 10x longer, coins can also be melted and reuse.

It is not up to the people to decide, once you stop printing low value notes (I suggest 100r,500r,1000r), once banks stop distributing them, the people have to use the coins.

Is Cambodia ready for US$1 coins?

I don't understand why we don't have coins, for the 100, 500, 1000 riels, these exchange hand so many times during the day it wears out very fast, those should be replace with coins.

Coins never have gold or any assets as reserve to back up ...

Coins never have gold or any assets as reserve to back up ...

Neither are the notes.

^^^
Nope, according to Bank of Thailand even though the banknotes are going to be a fraction compared with the Hard currencies (US Dollars, Euro, Japanese Yen, GB Pound and Swiss Franc)

^^^
Nope, according to Bank of Thailand even though the banknotes are going to be a fraction compared with the Hard currencies (US Dollars, Euro, Japanese Yen, GB Pound and Swiss Franc)

I don't understand what you mean, but what has Bank Of Thailand, what they say or promised got to do with Cambodia.

I don't think any currencies is back by gold and silver now.

^^
I refer to the reserves to back up the printed Banknotes

^^
I refer to the reserves to back up the printed Banknotes

Are you sure our government has anything to back up the bank notes. even the US government can not back up its notes.

Anyway, I can't understand the concept of backing up notes and not coins, when a $1 note has exactly the same value as a $1 coin.

^^^
Coins in past were made from gold and silver, so the reserves to back up is not necessary but not in case of paper currency which need reserves to back up - remember the day of Gold Standard when the paper currency had to be back up by reserves in Gold and foreign currency that use Gold Standard ...

^^^
Coins in past were made from gold and silver, so the reserves to back up is not necessary but not in case of paper currency which need reserves to back up - remember the day of Gold Standard when the paper currency had to be back up by reserves in Gold and foreign currency that use Gold Standard ...

Gold Standard was removed like 40 years ago.

Coins today are make out of Alunimium, nickle, copper, etc. It is no different to paper currency when the reserve cannot back up with gold/silver, but both are legal tender and should be view the same.

Actually, coins can be more valuable, metal price appreciate over time, the Australian 5c coins has 6.5c worth of metal now.

I can't see a valid reason why shouldn't Cambodia replace the lower value high circulation notes to more durable coins.

^^^
Yah, I know about that but the old reserves still go on ... BTW, Numismatic values which you are referring cannot be counted for the matter of related to foreign exchange though.

Take a look at the report on the International Reserves, Foreign assets held or controlled by the central bank which are readily available for financing the balance of payments imbalances or to be used as a tool in carrying out exchange rate policy. International reserves consists of monetary gold, special drawing rights (SDRs), reserve positions in the Fund, and foreign exchange assets, to give a basic idea about the reserves to back up the banknotes here

http://www.bot.or.th/English/Statistics/EconomicAndFinancial/ExternalSector/Pages/StatInternationalReserves.aspx


Here is the report on 30 Nov 2012
http://www2.bot.or.th/statistics/BOTWEBSTAT.aspx?reportID=94&language=ENG

Here is the Currency Act of BE 2501 (1958) -take a look at Section 30 to get the basic idea about the measures to ensure that the banknotes are not worthless paper which should be applied to Cambodian Riel as well

Section 30. The following assests shall be lawful components of the Currency Reserve:
(1) gold,
(2) foreign currencies which are convertible currencies or any other currencies prescribed by a Ministerial Regulation, which must be in the form of deposit with a bank outside the Kingdom or with an international financial institution,
(3) foreign securities payable in foreign currencies as stated in (2),
(4) gold and foreign assets paid as subscription to the International Monetary Fund,
(5) Reserve Tranche Purchase Certificate
(6) Special Drawing Right Certificate,
(7) securities of the Thai Government payable in foreign currencies as stated in (2) or in baht,
(8) domestic bills which the Bank of Thailand is permitted to purchase or rediscount, provided that the total value thereof does not exceed 20 per cent of the total amount of notes issued.

With respect to the assets stated in (1), (2), (3), (4), (5) and (6) above, the Bank of Thailand shall be required to maintain their total value at not less than 60 per centum of the notes issued.

http://www.bot.or.th/English/LawsAndRegulations/DocLib_EngLaw/Law_E15_Currency.pdf

^^^
BTW, Numismatic values which you are referring cannot be counted for the matter of related to foreign exchange though.

Not exactly sure what you are referring to, assume you refer to this

the Australian 5c coins has 6.5c worth of metal now.

If you care to collect millions of 5c coin, melt and separate the metal, you can sell the metal for more then its face value worth, obviously, the production cost may not justify the effort.

It has got nothing to do with foreign exchange.

Here is the Currency Act of BE 2501 (1958) -take a look at Section 30 to get the basic idea about the measures to ensure that the banknotes are not worthless paper which should be applied to Cambodian Riel as well



I don't know if it applied, or if it can apply to Riel, but if the government can cover the Riel in note form, it can replace the note and cover it in coin form.

^^^
Just encouraging more people to use coins instead of quickly worn banknotes ...
BTW, just tell them that those neighbors who run the printing presses to print banknotes now have to make around the clock vigilante on the prices of cotton (US Dollar per bale) since cotton is the main ingredient for paper for printing banknotes - at the level of Trillions Baht levels ....

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មាត្រា​២​ នៃ​​អនុក្រឹត្យ​បន្ថែម​​ទៀត​ថា​ ​ធនាគារ​ជាតិ​នៃ​កម្ពុជា​​ មាន​ភារកិច្ច​​ចេញ​សេចក្តី​​ប្រកាស​ដើម្បី​ផ្សព្វ​ផ្សាយ​​​ពី​លក្ខណៈ​សម្គាល់​នៃ​ធនប័ត្រ​ “​ព្រះបរមរតនកោដ្ឋ”​ ​ប្រភេទ​ ១០០០​រៀល​នេះ។

មាត្រា​៣​ នៃ​អនុក្រឹត្យ​ដដែល​នោះ​បាន​​​សង្កត់​ធ្ងន់​ថា​ រដ្ឋមន្ត្រី​ទទួល​​បន្ទុក​ទីស្ដីការ​​គណៈរដ្ឋមន្ត្រី​​ អគ្គទេសាភិបាល​​ធនាគារ​ជាតិ​នៃ​កម្ពុជា​​ រដ្ឋមន្ត្រី​​ រដ្ឋលេខាធិការ​គ្រប់​ក្រសួង​-ស្ថាប័ន​ និង​អភិបាល​រាជធានី​-ខេត្ត​ ត្រូវ​ទទួល​បន្ទុក​អនុវត្ត​អនុក្រឹត្យ​នេះ​តាម​ភារកិច្ច​រៀង​ៗ​ខ្លួន​ ចាប់​ពី​ថ្ងៃ​ចុះ​ហត្ថលេខា​នេះ​តទៅ។

បើ​គិត​​ចាប់​ពី​​​រាជរដ្ឋាភិបាល​អាណត្តិ​ទី​១​ (១៩៩៣) មក​ទល់​​នឹង​​​ពេល​នេះ​ ក្រដាស​ប្រាក់​​ ​១០០០​ រៀល បាន​បោះពុម្ព​ចំនួន​​៣​លើក​រួច​មក​ហើយ ហើយ​បើ​គិត​​ក្រដាស​ “​​ព្រះបរមរតនកោដ្ឋ”​​ ដែល​ត្រៀម​​ចរាចរ​​មាន​ចំនួន​បួន​លើក​ហើយ។​ ​​​​​ក្រដាស​ប្រាក់​ ១០០០​ រៀល​ ​​​​​បោះពុម្ព​លើក​ទី​មួយ​នៅ​​ថ្ងៃ​ទី២៥ ​​មិនា ១៩៩៥​​ ​ដែល​​​ម្ខាង​មាន​​រូប​ប្រសាទ​បាយ័ន​​(​ប្រាង្គ​ខាង​លើ)​​​ និង​ម្ខាង​​​រូប​ព្រះបរមរាជវាំង​​​ ​ឈប់​ដាក់​ឲ្យ​ចរាចរ​ហើយ​ លើក​ទី​​ពីរ​ ​បោះពុម្ព​នៅ​​ថ្ងៃ​ទី២៤ ​ធ្នូ​​​​ ១៩៩៩​​ ​ម្ខាង​​​​រូប​កសិករ​កំពុង​​​ធ្វើ​កសិកម្ម​បែប​ទំនើប​​​ និង​ម្ខាង​រូប​​​ប្រាសាទ​ព្រះ​វិហារ​​ ​កំពុង​ចរាចរ​ ​​​លើក​ទី​៣​ ​បោះពុម្ព​នៅ​​ថ្ងៃ​ទី​​​៦ ​មករា​​​​ ​ឆ្នាំ​២០០៦​ ​ម្ខាង​​រូប​ក្លោង​ទ្វា​ប្រសាទ​បាយ័ន​ និង​ម្ខាង​រូប​កំពង់​ផែ​ខេត្ត​ព្រះសីហនុ​ ​និង​លើក​ទី​៤​នេះ​ ​ម្ខាង​រូប​​ព្រះបរមរតនកោដ្ឋ​​ និង​ម្ខាង​រូប​ដង្ហែ​​ព្រះបរមសព​ចេញ​​ពី​​អាកាសយានដ្ឋាន​​អន្តរជាតិ​ពោធិចិនតុង​​ មក​ព្រះបរមរាជវាំង៕

http://news.sabay.com.kh/wp-content/uploads/2013/01/Banknote.jpg

Source:
http://news.sabay.com.kh/articles/366490

^^ What does it say, are they going to print this version of 1000r form now on, or is it a special edition?

^^
It's a new bill will come to public on Jan 1, 2013.