National Bank of Cambodia Implements Dual Currency Mandate to Boost Riel Usage
NBC's Directive Aims to Strengthen Riel's Position in Financial Landscape
As Cambodia commemorates the 44th anniversary of the reintroduction of the riel, the National Bank of Cambodia (NBC) has rolled out a new directive mandating dual currency bank accounts for locals and foreigners alike. This move underscores the NBC's commitment to elevating the status of the national currency in the country's financial ecosystem. Here's a closer look at this initiative and its implications for Cambodia's economic landscape.
In a directive dated March 19, 2024, the NBC has instructed financial entities to establish and operate accounts in the local currency. This mandate aims to provide options for payment transactions in Khmer riel (KHR) and necessitates monthly compliance reporting to the NBC. While the directive does not currently require mandatory salary payments in riel, it aligns with previous moves towards riel-centric transactions, as seen in 2019's requirement for businesses to issue tax invoices in KHR.
The Annual Report 2023 and 2024 Target by the NBC highlight the challenges faced by the riel, including devaluation pressures stemming from decreased USD inflow and increased government spending. However, the NBC's intervention through foreign exchange market activities and monetary policy tools has played a crucial role in stabilizing the currency's downward trend.
Chea Serey, Governor of the NBC, has emphasized the resilience of Cambodia's banking system amidst global economic disruptions. She views the stability of the banking sector as fundamental to ongoing economic stimulation within the country.
Cambodia's embrace of digital financial services is evident in the adoption of platforms like Bakong, a digital payment system developed by the NBC. With millions of accounts and merchant acceptances, Bakong signifies a shift towards cashless transactions, offering convenience and security in financial transactions.
While the investment community remains cautiously optimistic about the riel's resurgence, the promotion of the local currency is viewed as a strategic move towards financial sovereignty. The banking sector, including institutions like ABA Bank, is actively supporting the NBC's efforts by streamlining account opening processes and prioritizing riel transactions through ATMs.
As Cambodia navigates its currency transition, stability and confidence-building measures will be crucial. The NBC's initiatives, coupled with the country's commitment to digitalization in financial transactions, signal a concerted effort towards strengthening the role of the riel in Cambodia's economic future.
In a directive dated March 19, 2024, the NBC has instructed financial entities to establish and operate accounts in the local currency. This mandate aims to provide options for payment transactions in Khmer riel (KHR) and necessitates monthly compliance reporting to the NBC. While the directive does not currently require mandatory salary payments in riel, it aligns with previous moves towards riel-centric transactions, as seen in 2019's requirement for businesses to issue tax invoices in KHR.
The Annual Report 2023 and 2024 Target by the NBC highlight the challenges faced by the riel, including devaluation pressures stemming from decreased USD inflow and increased government spending. However, the NBC's intervention through foreign exchange market activities and monetary policy tools has played a crucial role in stabilizing the currency's downward trend.
Chea Serey, Governor of the NBC, has emphasized the resilience of Cambodia's banking system amidst global economic disruptions. She views the stability of the banking sector as fundamental to ongoing economic stimulation within the country.
Cambodia's embrace of digital financial services is evident in the adoption of platforms like Bakong, a digital payment system developed by the NBC. With millions of accounts and merchant acceptances, Bakong signifies a shift towards cashless transactions, offering convenience and security in financial transactions.
While the investment community remains cautiously optimistic about the riel's resurgence, the promotion of the local currency is viewed as a strategic move towards financial sovereignty. The banking sector, including institutions like ABA Bank, is actively supporting the NBC's efforts by streamlining account opening processes and prioritizing riel transactions through ATMs.
As Cambodia navigates its currency transition, stability and confidence-building measures will be crucial. The NBC's initiatives, coupled with the country's commitment to digitalization in financial transactions, signal a concerted effort towards strengthening the role of the riel in Cambodia's economic future.
Translation:
Translated by AI
