Cambodia Reduces its Dependency on the US Dollar

Infusions of riel banknotes and the introduction of digital currencies are helping extend the central bank’s control.

Ever since United Nations peacekeepers arrived in war-torn Cambodia to oversee elections held in 1993, the U.S. dollar has been a mainstay of the local economy with a dual currency system providing steady exchange rates in a volatile place.

That began to change in May when the National Bank of Cambodia (NBC) announced it would phase-out small-denominated U.S. dollar bills – $1, $2, and $5 notes – following negotiations with banks and micro-finance institutions (MFIs).

“Cambodia has to encourage the use of its riel, more. So, allowing the circulation of small U.S. bills is an obstacle in urging the use of the riel,” the NBC said.

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