The National Bank of Cambodia’s (NBC) statement explains that they aim to facilitate the reduction in circulation of US dollars within the local economy. The NBC aims to create a dialogue among key stakeholders such as experts, academics, and representatives of the wider community on ways to boost the circulation of the local currency. According to the announcement, “Cambodia has experienced high dollarisation in the last two decades, with foreign currency deposits, relative to broad money, rising from 60% in the 1990s to 80% in the 2000s and now at 83%” This state of affairs poses serious risks to the Kingdom’s financial sovereignty. It limits the ability of the central bank to implement effective monetary policy and may exacerbate financial stability risks; particularly liquidity risks. “In this context, the Royal Government of Cambodia has considered promoting the use of Riel as one of its top policy agendas,” the announcement says. One positive to be taken from the announcement is the news that riel circulation has increased on average by 17% per annum, and deposits by 24% per annum, during the last two decades.
