Cambodia: NBC says riel annual average growth at 16.6%

The riel has seen a steady increase in demand over the past two decades, growing at an average rate of 16.6 per year, even though the economy remains heavily dollarised, a senior official at National Bank of Cambodia said yesterday.

Peace, political and economic stability have boosted confidence in the local currency, said Chea Serey, Deputy Governor, NBC, while speaking at a ceremony in Kampong Thom province to mark the 43rd anniversary of the reintroduction of the riel.

“The demand for riel has steadily increased, reflected in an increase in riel circulation with an average annual growth rate of 16.6 percent from approximately 356 billion riels (around $8.4 million in 1998 to 14.1 trillion riels (about $10 billion) in 2022,” Serey said.

This year is the 43rd year that Cambodia has issued and re-launched the riel, the longest period in the history of Cambodia to use its currency sustainably
and steadily, she said.

The peace achieved under the win-win policy of Prime Minister has provided the basis for socio-economic development and renewed trust in riel, she added.

“Trust is indispensable with peace, political stability and economic stability, which leads to people having jobs, a better life and a wider use of riel,” Serey said.

NBC has launched several campaigns to raise public awareness about the importance of using riel.

A range of campaigns to promote riel have been made, including celebration of the Riel Day, organisation of seminars, swapping old, damaged, or torn riel notes for new ones, conducting research on the current situation of de-dollarisation in Cambodia.

The transformation of the Cambodian economy from a dollarized economy to a riel-based economy requires the active participation of all stakeholders, both public and private, and the general public, who must be vigilant in their use of riel regularly to achieve the goal, although it takes a little longer, the NBC deputy governor said.

“Participating in using riel is definitely contributing directly and indirectly to protecting and strengthening the economic sovereignty, national identity and solidarity, and social and economic prosperity,” she said.

The NBC-initiated Bakong system, launched in 2018, could
lead to a rise in the usage of local currency.

It is an example of how a digital payment system can help strengthen a local currency, foster user inclusivity, and reduce dependence on external factors.

According to NBC’s report as of 2022, the payment system infrastructure has grown manifold and has contributed remarkably to financial inclusion. The number of transactions using the system increased year on year by 2.7 times to 30.3 million.

The transactions included KHR 14.59 trillion and $13.54 billion, increased by 4.8 times and 3.7 times compared to 2021 respectively.