Riel trust needed for stability
As much as $320 million is being lost annually as a result of Cambodia’s reliance on the US dollar, while a longstanding mistrust in the riel means there is less of the local currency in circulation, restricting the national bank’s ability to respond in times of economic crisis, the country’s leading voices on the economy say. Cambodia’s loss of seigniorage – the vaule a country gains in producing its own currency – equates to about 2 per cent of total GDP, Jayant Menon, lead economist at the ADB’s office of regional integration, estimates. Menon is urging the National Bank of Cambodia to consider installing a new mechanism that could govern riel exchange rates and assist in de-dollarising Cambodia’s economy. … Cambodia is currently the most dollarised economy in all of Asia, with an estimated 85 per cent of all currency in circulation being US dollars. …
Eddie Morton
http://www.phnompenhpost.com/business/riel-trust-needed-stability
