NBC calls for further growth in riel usage

NBC calls for further growth in riel usage

Yim Leat, Deputy Governor of the National Bank of Cambodia (NBC), has urged all ministries and institutions to strengthen coordination and cooperation to promote the use of Khmer riel, emphasising that broad adoption of the national currency is essential for Cambodia’s economic independence and long-term stability.

Leat made the call during a ceremony in Stung Treng province on Monday, held to commemorate the 45th anniversary of the riel’s reintroduction into circulation. The event also highlighted the role of the Bakong digital payment system and KHQR in modernising Cambodia’s financial ecosystem.

Tracing the riel’s history, Leat noted that after Cambodia gained independence from France in November 1953, the NBC was established in December 1954, and the riel was first issued in September 1955. “This means the riel has been in circulation for 70 years,” he said. “However, a question arises: why are we celebrating only the 45th anniversary?”

He explained that Cambodia’s civil war in the early 1970s, followed by the genocidal Khmer Rouge regime (1975–1979), led to the complete abolition of the riel. It wasn’t until March 20, 1980, after the country’s liberation, that the riel was officially reintroduced. “From that time until now, the riel has been in circulation for 45 years,” Leat said.

Leat cited studies conducted by NBC in collaboration with JICA since 2017, which found that the riel is widely used in rural areas. In Stung Treng province, around 93 percent of daily expenditures are made in riel.

Another study with the UNDP showed that factory workers outside Phnom Penh use the riel for about 92 percent of their daily expenses—including rent, utilities, food, transportation, clothing, and medicine—compared to 82 percent in the capital.

“When both sellers and buyers use the same currency, transactions become quicker and easier, with no concerns about exchange rates,” he said. “Compared to the US dollar, the riel has shown strong stability. For example, the exchange rate never fluctuates beyond 4,300 riel or below 4,000 riel to the dollar.”

To further boost riel usage, NBC and the Ministry of Education, Youth and Sports recently issued joint guidelines encouraging the use of riel in payment services at educational institutions. Leat said similar collaboration with other ministries is planned to expand these efforts.

He also called for greater support for riel users, urging service providers not to impose extra fees on transactions made in the national currency. “Joint efforts among all ministries and institutions are necessary to promote the use of the riel. Please continue to participate—whether in payments, price labeling, or savings,” he appealed.

Stung Treng Governor Sar Soputra echoed Leat’s message, noting the NBC’s consistent commitment to strengthening the banking and financial sector as a key driver of Cambodia’s development, especially amid rapid technological advancement.

“Today’s campaign highlighted the importance of the riel and encouraged its use in both small and large transactions,” Soputra said. “It also aimed to enhance financial literacy, particularly among young people, by educating them about the Bakong system and formal financial services.”

While the US dollar has been deeply embedded in Cambodia’s economy since the 1990s—when public trust in the riel was low—Soputra said the riel has demonstrated strong and stable value over the past two decades, helping reduce reliance on foreign currency. He credited the government’s stable macroeconomic policies for supporting the growing use of the riel.

According to NBC, the use of the Khmer riel is essential for strengthening national identity, building public trust in state institutions, fostering social solidarity, and promoting a sense of unity and patriotism.

Economically, a greater presence of the riel in circulation improves the effectiveness of monetary policy, allowing NBC to manage macroeconomic strategies more efficiently and support long-term economic development, as the money supply is closely linked to production and employment.

The apex bank also has been highlighting that dependence on the US dollar makes Cambodia vulnerable to external economic shocks, particularly from the US economy. “If the riel were the dominant currency, the central bank would be better positioned to act as a lender of last resort.

“Additionally, exclusive use of the riel would enable the government to earn seigniorage—revenue from issuing currency—and reduce transaction costs associated with currency exchange in the marketplace.”

khmertimeskh