May 22, 2019
The National Bank of Cambodia (NBC) held an event to commemorate the 39th anniversary of the reintroduction of the riel, Cambodia's national currency, in the country's capital, Phnom Penh, on March 25, 2019.
In Cambodia, the Pol Pot regime abolished the national currency, but the NBC reintroduced it on March 20, 1980, after the Pol Pot regime fell, and the circulation of national currency began again. The purpose of this event was to increase the public’s awareness of the importance of using the national currency in Cambodia, where the U.S. dollar continues to be used frequently.
Guest speakers were In Channy, the CEO of ACLEDA Bank Plc., a major Cambodian bank; Kea Borann, the CEO of AMK Microfinance Institution Plc.; Jojo Malolos, the CEO of Wing Limited Specialised Bank, which has the country's largest settlement network; Chy Sila, the CEO of Sabay Digital Corporation, which operates a Web payment app; and JICA-RI Research Fellow Daiju Aiba.
JICA-RI, together with the NBC, is carrying out the research project "Empirical Study on the Promotion of Home Currency in Cambodia." The project is examining the background of the dollarization of Cambodia's economy and effective policies for promoting the circulation of the riel, based on analysis of data from surveys of financial institutions, companies and households throughout the country.
At this event, JICA-RI’s Aiba presented the results of the two surveys conducted so far, along with policy proposals based on those results.
He pointed out that looking at the results of the surveys, the use of the riel is increasing by companies and households, but lending and deposits remain centered on the dollar in the banking sector. In particular, he continued, the capital flow from outside to the domestic banking sector, which has grown large in recent years, has supplied dollars domestically. Though deposits in riel are increasing rapidly, the level of dollarization throughout the country has not fallen.
Aiba added that many companies are doing business in the local currency, but many of them lack the appropriate accounting knowledge. So, encouraging improvement of their management skills, and focusing on accounting, would be effective in promoting the use of the riel.
At the end of the event, a panel discussion was held, with Chea Serey of the NBC serving as moderator.
In response to the audience question "Why is it that the higher the income of a person the more they borrow in U.S. dollars?" Aiba said that the main reason is that higher the income the more of their income is paid in dollars. He went on to say that another problem is that often there is no riel option available when a person borrows a large amount of money.
Channy of ACLEDA and Borann of AMK made comments indicating that their banks would cooperate to help popularize the riel.
Malolos of Wing said that because Wing's payment service is often used for small amounts, the riel is frequently used with it.
Many members of the local media attended the event, and several media organizations covered it. There was a front page story on the event in the KHMER TIMES, showing the high degree of local interest.