The National Bank of Cambodia announced on Friday a new plan to phase-out circulation of small-denominated U.S. dollar bills in the country’s highly-dollarized economy, creating some confusion among citizens if these bills had been banned outright.
In a press release, the National Bank of Cambodia (NBC) said it would phase out the $1, $2, $5 bills, while pushing for the use of the Cambodian riel. The statement was released after a meeting with bank and MFI representatives.
This would be done by giving commercial banks and microfinance institutions three months, ending August 31, to send small bills in their possession back to the NBC, thereby removing them out of circulation. While the NBC said small denominated bills were still legal tender, banks and MFIs would be expected to incur costs of transporting these bills after August 31.