Cambodia announces new initiative to encourage use of local currency

The National Bank of Cambodia (NBC) and the country's Ministry of Commerce have recently announced a major step to promote the use of the local currency by encouraging businesses to register new bank accounts in riel.

A joint statement by the two agencies said that the initiative aims to reinforce the implementation of the Law on Commercial Enterprise and promote the use of riel in business. All banks and financial institutions were urged to cooperate in establishing riel-denominated accounts for all registered businesses.

Dollarization, the widespread use of US dollar as legal tender, has been a persistent challenge for Cambodia since 1993, the time when a large amount of US banknotes were introduced in Cambodia.

The Ministry of Commerce has been actively working with the NBC to promote the use of the local currency such as requiring businesses to price tags their products in riel.

According to Buon Sarakmony, Secretary of State of the ministry, riel price tag has really provided many benefits such as strengthening public awareness of the riel price level, increasing the habit of using the riel, promoting the use of the riel, and increasing transparency for users of the local currency by reducing the cost of exchange operations.

The digital payment of ‘riel’ through the Bakong system touched 75.6 million transactions in the first half of this year, an increase of 180% compared to the same period in 2023, a NBC report showed.

The transaction value was about KHR64.9 trillion ($16 billion), an increase of 140% year-on-year, it added