Traders urged to use riel
In an effort to boost the use of the riel, private companies have called on the National Bank of Cambodia (NBC) to ensure that all goods worth less than $100 are priced in riel.
Lim Heng, vice president of the Cambodia Chamber of Commerce, said at the NBC’s 37th anniversary of the introduction of the riel yesterday that the currency plays a crucial role in the economy and in reducing poverty.
He said national and foreign currencies were mixed up in investment, trade and goods transactions creating confusion in the economy.
Mr. Heng said financial institutions, companies and small and medium-sized enterprises, mostly in the cities, continue using foreign currency.
He said US dollars were used mostly for imports and exports because the economy depends on foreign investment and the import of raw materials.
The riel, he added, is seen as for small transactions.
“To push the use of the riel and to boost the value of the national currency, some measures should be taken by small to big businesses such as retail stores.
“Supermarkets must set in riel every transaction below $100.
“If five million out of the population of 15 million spend at least 80,000 riel per day on purchases, we will have about 400 billion riel ($100 million) of our currency in use every day.”
Sok Piseth, president of the Young Entrepreneurs Association of Cambodia, said that he agreed with the concept of setting prices of products in riel.
He said that his company and association members had done it for a year.
All 15 members of the association paid their staff in riel, Mr. Piseth pointed out.
Cambodia Microfinance Association president Hout Ieng Tong said the use of riel is good for the country.
“It will help the economy when the people use riel only. For example, if the government required all tourists to exchange their currency for local currency it would create many jobs for money changers,” said Mr. Ieng Tong.
“When we use riel, the government will find it easy to manage inflation and the national budget,” he added.
Mr. Ieng Tong said at the moment it was difficult to exactly know how much riel and US dollars are in circulation in the country due to the mixing of both currencies in day-to-day transactions.
NBC deputy governor Neav Chanthana said the national currency has a significant value for society, politics and the economy, and plays a crucial role to represent “the sovereignty, culture, civilization and the independence of the kingdom.”
Ms. Chanthana said on average 17 percent of trading in the market was in riel, as was 26 percent of currency in the banking system.
The US dollar’s share of market trading, she said, had been stable at 83 percent since 2012.
“The riel has mainly contributed to strengthening efficiency in implementing financial policy and maintaining macro-economic fundamentals,” Ms. Chanthana said.
She said that to increase the amount of riel in circulation in the country, the NBC has encouraged all private sector companies to pay their staff in riel.
The NBC has also called on financial institutions to increase the proportion of loans in riel to 10 percent of their loan portfolios until 2019.
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