De-Dollarization and the Importance of Public Sentiment in Cambodia

The challenge of promoting the use of the riel is not just one of monetary policy. It also touches on questions of Cambodian national identity.

There are a number of reasons why the Cambodian government has long sought to achieve “rielization” – limiting the use of the United States dollar and promoting the circulation of the local currency, the riel.

First, as Chea Serey, governor of the National Bank of Cambodia (NBC), has put it, widespread use of the riel “could enhance the effectiveness of conducting monetary policy to maintain price stability and support economic growth.”

Second, the NBC cannot be a lender of last resort – offering loans to banks or other eligible institutions that are experiencing financial difficulties – if it cannot get people to hold the local currency.

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