The demand for riel is changing due to the socio-economic climate of the Kingdom.
Phillip Bank Plc’s General Manager Han Peng Kwang says the usage of riel (national currency) starts to gain its popularity by posting of prices in riel at supermarkets, more restaurants and retail outlets. Even big shopping malls like Aeon Shopping Mall, Bayon Supermarket, Lucky Supermarket and others are also displaying their goods in riel besides than US dollar.
Furthermore, the usage of local currency in the rural areas are already prevalent and widespread showing that Cambodians comfortably transacting in riel. All these proven that riel usage is slowly becoming a norm in the market place.
It is a fact that high dollarization has made Cambodia an attractive destination for foreign investments over the years and has given the economy much-needed stability after years of civil conflict.
However, it has also caused the country to be vulnerable by dramatically shifts in the international economy since Cambodia unable to implement effective monetary policies to manage the economy. Therefore, if riel is widely used and accepted, the regulator will have a stronger influence over its monetary policies in the country.
The control over monetary policies of a country if vested in the national authority will benefit the economy. Besides being able to implement monetary policies, with usage of riel, the country will gain economic sovereignty, national pride and seigniorage.
At the same time, other local business will also benefits from this since the use of common currency will reduce other costs besides their production and employment.
Since the public sector transacted mainly in riel such as EDC (Electrcite Du Cambodge), Water Authority and other ministries, therefore private sector will benefit if they switch to riel in order not to incur any foreign exchange losses when they convert their dollar to riel while transacting with the public sectors.
Mr. Han further added that, Philip Bank is promoting riel by encouraging and persuading the retail and corporate customers to borrow in riel instead of dollars.
The bank also supporting a few microfinance institutions vide wholesale lending to give them more working capital so that they can lend in riel to support the Cambodians living in the rural areas and villages.