National Bank of Cambodia looks at local yuan role
Bank of China is in negotiations with Cambodia’s central bank on the promotion of business transactions in Chinese yuan. The official talks reflect rapid trade growth between the two countries at a time when several commercial banks in Cambodia have launched yuan remittance and trade-settlement products. The Chinese government has given tax benefits to Chinese companies that have settled foreign trade in the currency since 2010, but the discussion between the National Bank of Cambodia (NBC) and state-owned Bank of China was a sign that China would take a more proactive hand in moving away from the US dollar medium in bilateral trade. … Business transactions in Cambodia’s main cities are done largely in dollars, which would require conversion to dollars regardless of the currency in which trade with China was conducted. Cambodia and China plan to double bilateral trade to US$5 billion by 2017. However, experts have noted that Cambodia’s trade deficit is widening and that increased trade with China would mean an influx of Chinese goods and services into the Kingdom.
