Although Cambodia did not issue its own currency until after independence in 1953, coins circulated here for more than 2,000 years – even before rise of the Angkor Empire in the 9th century.
These coins was found at excavation sites and archaeologists believe many more have yet to be uncovered, pointing to depictions of coins on objects from the Nokor Phnom era (also known as the Funan era), which dates back to the 1st century and is recognized as the first kingdom to emerge in the region. They suggest that this pre-Angkorian kingdom and its successor Chenla were familiar with the use of money and perhaps even produced their own coins very similar to those issued elsewhere.
The coins unearthed so far were made from several types of metal – copper, tin, silver and gold. They depict deities and animals, both mythical and real, as well as the moon or the rising sun, combined with Hindu symbols.
They also demonstrate the power, openness and sophistication of a vast kingdom that traded with both China and India, and beyond. Coins from the Roman Empire have been found at some archaeological sites, indicating that trade may have expanded beyond Asia.
Between 1863 and 1953, under the French Protectorate, France implemented the monetary system in Cambodia. This monetary system was also shared with Laos and Vietnam, who at that time were also under the French Protectorate. The three countries, so-called French Indochina, used common currencies issued by Banque de l’Indochine (a French commercial bank that received the privilege right to issue banknotes for Indochina). The value of these banknotes was linked to the French currency and uniform among all three colonies.
It was not until after King Norodom Sihanouk achieved full independence from France on November 9, 1953 that Cambodia had its own currency. The National Bank of Cambodia was established on December 23, 1954 and successfully launched the new riel in September 1955. Cambodia was then able to determine by itself the value of its currency, amounts to be issued, monetary advances to the government – as well as its trade policy and customs duties.
The riel continued to be used until 1975 when the Khmer Rouge overthrew the government, abolished money, bombed the National Bank of Cambodia, emptied Phnom Penh and other cities of their residents.
(The Pol Pot regime eventually did produce banknotes, but they were never used.) After the collapse of the Pol Pot regime in 1979, the riel was re-established as the national currency. The first banknotes were distributed on March 20, 1980.
A second challenge arrived in 1992 with the United Nations Transitional Authority in Cambodia (UNTAC) which brought much needed aid and security as well as a flood of US dollars. Research shows that during 1991-92, UNTAC spent $1.7 billion, equivalent to about 75 percent of Cambodia’s GDP at the time.
It also led to more foreign currency deposits at Cambodian banks, which now total around 90 percent of all deposits at Cambodian banks and microfinance institution.
This lack of monetary independence poses constraints to effective monetary policy implementation. Nevertheless, it would not be prudent for the National Bank of Cambodia to suddenly de-dollarize the economy because this would have impacts on macroeconomic stability and growth, such as capital outflow.
Instead, the NBC is promoting the use of the riel on a gradual basis and through market mechanisms.
Modern riel banknotes are emblazoned with images that resonate with Cambodian heroes, people and economic development to foster solidarity. This effort to promote the riel is supported by the stability of its value and the fact that most people in rural areas continue to use the currency.
The modern riel banknotes, which range from 50 to 100,000 riel notes also depict significant historical and cultural events as well as the growth of the economy. The smiling face of a female farmer harvesting rice appears on the back of the 2,000 riel note, acknowledging the vital importance of the nation’s agriculture sector. On the front, a triumphant illustration of Preah Vihear temple, listed as a UNESCO heritage site in 2008, highlights Cambodia’s rich history and strong cultural foundations.
The banknotes’ security is strong and sophisticated, graduating from various watermarks and distinct textural patterns on smaller notes to holograms, light changing strips and hidden patterns on notes from 10,000 riel and above. There are 37 security features embedded within the 100,000 bill and more than 30 in the 10,000, 20,000 and 50,000 notes.
These new banknotes also contain special features to aid the blind. The 5,000, 10,000, 20,000 and 100,000 notes all include braille, while smaller notes are printed in different sizes, allowing those with sight disabilities to easily identify each one.