Backing riel over greenback

26 Mar 2019  2048 | Business & Trade Fairs

Private sector financial institutions have urged the government to rein in some banks and microfinance institutions which are still promoting the US dollar instead of riel in rural areas while the majority are pushing for more use of the national currency in the Kingdom.

The call was made yesterday during the 39th anniversary of Khmer Riel Day held at Aeon II to increase the public’s understanding on the importance of using the national currency and to boost its circulation among people from all walks of life.

Kea Borann, president of Cambodia Microfinance Association, yesterday said that more and more financial institutions are disbursing and accepting riel in the rural areas where earnings are based on the national currency.

He noted however that there are still some institutions which are pushing for the use of US dollars in the rural areas so that they can benefit from the fluctuating exchange rate.

Mr Borann said while the US dollar is widely used in the urban areas, rural folk earn incomes in riel and it is unfair for them to have to service loans in US currency.

He urged the government to provide a level playing field by getting all financial institutions to deal with riel in rural areas.

“The riel is being widely circulated due to the fiscal policy of the National Bank of Cambodia (NBC) to promote the national currency,” Mr Borann said. “But it has to ensure that there is more public awareness on the benefits of its use.

In Channy, president of Association of Banks in Cambodia, yesterday said that the riel has gained significant traction over the last decade owing to the ease of using it to carry out daily transactions compared with the dollar.

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