Likelihood of Cambodia moving from USD to riel?

Phnom Poon · Post by **Phnom Poon** » Wed Apr 21, 2021 10:07 am

[Mod edit: from another thread]

they want to switch the economy to riel
they might even be assessing the opportunity to convert $ bank balances to riel
at a government rate

Doc67 · Post by **Doc67** » Wed Apr 21, 2021 10:24 am

Phnom Poon wrote: ↑Wed Apr 21, 2021 10:07 am they want to switch the economy to riel
they might even be assessing the opportunity to convert $ bank balances to riel
at a government rate

Where did that come from? That's how bank runs start.

MaxNormal · Post by **MaxNormal** » Wed Apr 21, 2021 10:37 am

Doc67 wrote: ↑Wed Apr 21, 2021 10:24 am
Phnom Poon wrote: ↑Wed Apr 21, 2021 10:07 am
IraHayes wrote: ↑Wed Apr 21, 2021 9:06 am I popped to the ATM yesterday and after the first machine had no money in it I took money from the next but it only had 100's in it.
. . .
If gold sellers/buyers are not working people can't even convert gold to cash.
it's worth taking riel from atms at this point, since $100s may become difficult to change
i hear gold 'offer' prices are way down anyway

they want to switch the economy to riel
they might even be assessing the opportunity to convert $ bank balances to riel
at a government rate
Where did that come from? That's how bank runs start.

Indeed, that would be a very worrying situation to develop, especially if it happened in the midst of the rest of the chaos...

fsdfdsdf · Post by **fsdfdsdf** » Wed Apr 21, 2021 10:54 am

The riel would soon be worth nothing without the dollar backing it

yongchi · Post by **yongchi** » Wed Apr 21, 2021 11:19 am

Doc67 wrote: ↑Wed Apr 21, 2021 10:24 am
Phnom Poon wrote: ↑Wed Apr 21, 2021 10:07 am
IraHayes wrote: ↑Wed Apr 21, 2021 9:06 am I popped to the ATM yesterday and after the first machine had no money in it I took money from the next but it only had 100's in it.
. . .
If gold sellers/buyers are not working people can't even convert gold to cash.
it's worth taking riel from atms at this point, since $100s may become difficult to change
i hear gold 'offer' prices are way down anyway

they want to switch the economy to riel
they might even be assessing the opportunity to convert $ bank balances to riel
at a government rate

Where did that come from? That's how bank runs start.

I would also like to see some more info on "might even be assessing the opportunity to convert."

Doc67 · Post by **Doc67** » Wed Apr 21, 2021 11:23 am

fsdfdsdf wrote: ↑Wed Apr 21, 2021 10:54 am The riel would soon be worth nothing without the dollar backing it

What do you mean, "backing it"? Neither the USD nor the US Treasury are backing anything.

There is some sort of 'peg' going on by the NBC, and that can be adjusted by them, or possibly the markets, at any time. Maybe the Chinese are helping out. I doubt there is much FX speculation in the USD/KHR but excessive printing and/or suggestions of an enforced conversation would send the KHR into a tailspin with USD deposits stopping in their tracks and current deposits heading for the exits.

USD/KHR 10 year chart.

Phnom Poon · Post by **Phnom Poon** » Wed Apr 21, 2021 11:37 am

i think it's extremely unlikely

TWY · Post by **TWY** » Wed Apr 21, 2021 11:49 am

fsdfdsdf wrote: ↑Wed Apr 21, 2021 10:54 am The riel would soon be worth nothing without the dollar backing it

--------

the official exchange rate is pegged to the dollar and by allowing dollars to be openly used along with the riel the peg is effective.

If they wanted to stop using dollars its likely they would switch to pegging the riel to the yuan and allowing it to be freely used in the country. If they don't peg and allow the use, then the central bank needs to have foreign reserves to try to provide a range of value for the currency. Otherwise it will freely float and likely crash as investors would likely have little confidence in the Cambodian government as the entity backing the currency.

timmydownawell · Post by **timmydownawell** » Wed Apr 21, 2021 12:29 pm

TWY wrote: ↑Wed Apr 21, 2021 11:49 am
fsdfdsdf wrote: ↑Wed Apr 21, 2021 10:54 am The riel would soon be worth nothing without the dollar backing it
--------

the official exchange rate is pegged to the dollar and by allowing dollars to be openly used along with the riel the peg is effective.

If they wanted to stop using dollars its likely they would switch to pegging the riel to the yuan and allowing it to be freely used in the country. If they don't peg and allow the use, then the central bank needs to have foreign reserves to try to provide a range of value for the currency. Otherwise it will freely float and likely crash as investors would likely have little confidence in the Cambodian government as the entity backing the currency.

It's not pegged though, it floats within a very small range (4000-4100r) to the USD, probably because the USD is so commonly used.

Jerry Atrick · Post by **Jerry Atrick** » Wed Apr 21, 2021 12:32 pm

timmydownawell wrote: ↑Wed Apr 21, 2021 12:29 pm
TWY wrote: ↑Wed Apr 21, 2021 11:49 am
fsdfdsdf wrote: ↑Wed Apr 21, 2021 10:54 am The riel would soon be worth nothing without the dollar backing it
--------

the official exchange rate is pegged to the dollar and by allowing dollars to be openly used along with the riel the peg is effective.

If they wanted to stop using dollars its likely they would switch to pegging the riel to the yuan and allowing it to be freely used in the country. If they don't peg and allow the use, then the central bank needs to have foreign reserves to try to provide a range of value for the currency. Otherwise it will freely float and likely crash as investors would likely have little confidence in the Cambodian government as the entity backing the currency.
It's not pegged though, it floats within a very small range (4000-4100r) to the USD, probably because the USD is so commonly used.

It's been as low as 3700 and as high as 4450 to $1 in recent years

Such fluctuations were common before and after the larger holidays, although it seems more stable the past few years to me

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