Single title

Monetary Policy and Rielization

by Rasheed Griffith, Lor Samnang

The article is part of the book series Cambodia 2040, which is published by Future Forum and Konrad-Adenauer-Stiftung Cambodia. Enjoy the read!

Cambodians finally shifted to the Riel in droves after the government announced that they would transition the National Bank of Cambodia into an orthodox currency board arrangement (CBA) with the anchor currency as the U.S. Dollar; forgoing the pretence of an independent Central Bank.

Why should I read this chapter? ... because monetary policy and Rielization will bring Cambodia forward!

Mr. Brevin Anderson and Mr. Lor Samnang's vision for Cambodia's monetary policy and Rielization in 2040: 

  • Cambodia has demonstrated a deep structural transformation in its approach to monetary policy. Cambodia achieved its goal of practical internal de-dollarization/Rielization which followed a wide adoption of the domestic currency by the population. 
  • Cambodia’s selection of the Khmer Riel anchor currency must be contextualized within an analysis of monetary geopolitics.

 

Short story: 

Vichet arrived in Cambodia for the first time in 20 years since migrating to the United States at a young age. It is now 2040 and he is amazed by the rapid and pronounced development of Cambodia since he left. He needs to find a mobile sim card in order to use the internet and make a call to his friend. The cost of a sim card is 20 Riel but he realizes that there is no Riel currency in his pocket. Therefore, he has to exchange from USD to Riel to buy a sim card. He then can use the internet and install Grab in order to go to the hotel. The transportation cost is 40 Riel as it appears on his phone’s screen. He realized that he has to exchange all his USD to Khmer Riel for any transaction being made as it seems that business in Cambodia will only accept Riel for the sale of goods and services. Vichet asks the taxi driver to find him the currency exchange service along the way to the hotel where he can exchange his remaining USD currency to Khmer Riel. Stepping into the hotel late at night, he walks to the reception area and pays 150 Riel for three nights. The next morning Vichet calls his friend Kosal to discuss his purpose of coming to Cambodia. They go to Starbucks where it is convenient to talk about Vichet’s business plan. Vichet and his friend talk about a potential project that entails an investment of about 800,000 Riel. Recognizing that the kingdom as a whole does its “mental financial math” in Riel, Vichet soon realizes that Rielization is real.

 

Enjoy your reading!

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