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Gold, Riel Not Affected by Dollar Fluctuations

Chea Vannak / Khmer Times Share:
Gold and jewelry on display at Central maket in Phnom Penh. Gold prices have risen slightly this year, but have not been affected by flucuations in the United States currency or the drop in global oil prices. KT/ Mai Vireak

With global oil prices down and a devalued United States dollar, the price of gold has remained stable and has risen slightly while trade at gold shops has been steady, a gold shop owner said yesterday.
Heng Chhay Tith, the owner of Heng Chhay Tith Jewelry, one of biggest gold and jewelry shops in Phnom Penh, said the price of gold was about $1,500 per Damlung (26.67 Damlung equals one kilogram) yesterday, which he said has risen by a small amount.
According to a report from the Ministry of Commerce, the price of gold in Cambodia was $1,472 per Damlung by March 10, up 4.67 percent compared with $1,456 earlier this year.
Mr. Chhay Tith said the price of gold in his shop was based on the international market price in London, and added that deflation in the US currency did not influence the price of gold at his shop.
However, Mr. Chhay Tith said the trade in gold in Cambodia rose ahead of big occasions like Khmer New Year or Pchum Ben, when people liked to buy gold ornaments for personal use.
“Most of them buy gold rings, bracelets and necklaces,” he said. “Only a few buy gold for trade.  
“We have to set our prices in line with international markets. If we set our prices lower than the international market, gold in Cambodia would be sold out.”
Sieng Lim, who owns the Ly Hour Exchange shop, one of the major money exchanges in Phnom Penh, shared Mr. Chhay Tith’s views and said she did not think there had been any surge in buying gold because the US currency has been devalued.
“I know the price of gold in Cambodia is increasing,” Mrs. Lim said. “If the gold price is high, people like to sell their gold to make a profit, but they will likely buy when the price of gold goes down.
“I don’t think the US currency value plays any role in the demand for gold in Cambodia,” she added.
So Phornary, the deputy CEO of Acleda Bank, said the drop in value of the US currency and the low price of oil are not relative to increases or decreases in the gold price, adding that the price of gold is based on international markets.
However, the devaluation of the US currency has benefited the Cambodian riel, Mrs. Phornary said, adding that she noticed the Cambodian currency is stable now due to its increasing circulation, reflecting the fact that people are more confident using the riel.
Deflation of the riel against the US dollar has helped boost the use of the currency in trade and also to strengthen the confidence of those who use it for trade and day to use, experts said.
The Ministry of Commerce is now updating the price of oil products every 10 days using riel. The National Bank of Cambodia has also called on people to use the riel in a bid to strengthen its value and boost confidence in its use.

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