As Cambodia’s riel continues its gradual downhill slide against the dollar, prices for foodstuffs have increased by an average of 20 percent in recent weeks, market vendors said Sunday.
Basic items such as eggs, chicken, sugar, rice and the Cambodian staple fish sauce, prahoc, all have increased in price since the beginning of the month, according to grocery vendor Keng Sang at Phnom Penh’s Kandal market.
The price of 10 eggs has jumped to 2,800 riel ($0.73) from 1,800 riel ($0.49) just two weeks ago, she said.
One kilogram of chicken has increased from 5,500 riel to 6,000 riel, and the price of a bottle of prahoc has gone from 1,700 riel to 1,900 riel, she reported.
Vendors at Phsar Thmei reported similar price hikes, as well as in rice and vegetables.
One economic analyst said there are several possible reasons for the increases, including seasonal availabilities.
The reason could also be psychological, a “knee-jerk” reaction as the July elections approach and people hoard food for fear that shortages may occur, driving up prices, the analyst said.
National Bank Deputy Governor Suom Nypha also said Sunday that the riel’s depreciation and subsequent price increases are partly psychological.
The riel has dropped about 5 percent since the beginning of the month. At Ly Hour exchange shop near Olympic market, trading closed Sunday at 3,940 to the dollar.
In an attempt to halt the slide and keep market prices from increasing, NBC Governor Chea Chanto earlier this month met with currency traders and decided to sell riel at a lower-than-market rate.
The riel, however, has continued to slide. Suom Nypha said that although she believes prices will fall again after the election, the NBC is worried that people may lose confidence in the riel and rely even more heavily on foreign currencies.
Analysts and NBC officials have said that Cambodia’s dollarized economy has both helped to create the problem and keep Cambodia from descending into the turbulence that has engulfed other countries.
Suom Nypha said the heavy dependence on the dollar has driven up its demand, thus resulting in the riel’s depreciation. She appealed to people to use the riel.
But the analyst said that although prices have risen in riel, the dollar equivalent has remained level. The widespread use of the greenback has helped to soften the impact.
Some consumers, however, are feeling the pinch.
Nhem Savy, who sells soft drinks near the Royal Palace, said Sunday that three of her children used to work to help support the family, but now all six have jobs, including her 13-year-old daughter, who recently started selling nuts.
“The currency isn’t worth enough to pay for everything because the price of goods is too high,” said 49-year-old Nhem Savy. “We’re very worried.”
Vendor Keng Sang she is not too concerned yet and she will continue to raise prices if the riel depreciates so that her business does not suffer, but she acknowledges that not everyone is so lucky.
“It’s not so much a problem for me,” said Keng Sang, “but it is a big problem for the poorer people.” (Additional reporting by Debra Boyce)