Cambodian riel

Cambodian riel. It is the official currency of the Kingdom of Cambodia, symbolized as ៛ and issued by the National Bank of Cambodia. The riel was first introduced in 1953 following independence from France, but its modern circulation was re-established after the fall of the Khmer Rouge regime. While the riel is used for most daily transactions, the United States dollar is also widely circulated within the country's dual-currency system.

History

The riel was first introduced in 1953, replacing the French Indochinese piastre after Cambodia gained independence under King Norodom Sihanouk. During the subsequent Cambodian Civil War and the rule of the Khmer Rouge, the currency was abolished entirely in favor of a moneyless society, as documented in the Tuol Sleng Genocide Museum archives. Following the Vietnamese invasion of Cambodia and the establishment of the People's Republic of Kampuchea, the riel was re-introduced in 1980 to stabilize the war-torn economy. Throughout the United Nations Transitional Authority in Cambodia period in the early 1990s, the currency faced severe inflation and competition from foreign notes, leading to the de facto dollarization that persists today.

Coins and banknotes

Coins were historically issued in denominations of 5, 10, 20, and 50 sen, but are no longer in practical use. Modern banknotes are produced by security printers such as Note Printing Australia and Polska Wytwórnia Papierów Wartościowych, featuring iconic national symbols. Current notes in circulation include the 100៛, 500៛, 1,000៛, 2,000៛, 5,000៛, 10,000៛, 20,000៛, 50,000៛, and 100,000៛ denominations, often depicting images of Angkor Wat, Preah Norodom Sihanouk, and other figures like Preah Bat Samdech Preah Norodom Sihamoni. Special commemorative notes have been issued for events like the Water Festival and the anniversary of the National Bank of Cambodia.

Exchange rates and value

The riel operates under a managed floating exchange rate regime, with its value primarily influenced by the National Bank of Cambodia's interventions in the foreign exchange market. It has historically maintained a relatively stable but weak exchange rate against major currencies, particularly the United States dollar and the Thai baht. The exchange rate typically fluctuates around 4,000 to 4,100 riel per United States dollar, a benchmark closely watched by businesses in Phnom Penh and Siem Reap. The value is also affected by regional economic conditions within the Association of Southeast Asian Nations and trade flows across borders like Bavet and Poipet.

Usage and circulation

The riel is used for most small-scale transactions, payments at local markets like Phsar Thmei, and for government-related expenses such as utility bills and Ministry of Economy and Finance salaries. However, the United States dollar dominates larger transactions in sectors like real estate, tourism at Angkor Wat, and major hotels in Sihanoukville. This dual-currency system is most evident in urban centers, whereas rural provinces like Kampong Cham and Battambang rely more heavily on the riel. The circulation is managed through a network of commercial banks such as ACLEDA Bank and Canadia Bank, as well as microfinance institutions.

Monetary policy and issuing authority

Monetary policy and currency issuance are the sole responsibility of the National Bank of Cambodia, headquartered in Phnom Penh. The bank's governor, a position held by figures like Chea Chanto, implements policies aimed at ensuring price stability and promoting the use of the riel through initiatives like the "Riel Promotion Campaign". The National Bank of Cambodia manages foreign exchange reserves, sets reserve requirements for institutions like ABA Bank, and issues government securities. Its policies are coordinated with the Ministry of Economy and Finance and are influenced by broader economic programs supported by the International Monetary Fund and the World Bank.

Category:Currencies of Asia Category:Economy of Cambodia