KHR fixed term deposit

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samrong01
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Re: KHR fixed term deposit

Post by samrong01 »

clutchcargo wrote: Tue Apr 06, 2021 10:28 pm
samrong01 wrote: Tue Apr 06, 2021 9:57 pm I have never said the rates changed after the start of the coronavirus hysteria.
samrong01 wrote: Tue Apr 06, 2021 3:20 pm Cambodia is a small corrupt country with few resources and has recently destroyed its tourist industry which was perhaps 20% of its economy. Because of this you can get higher interest on their currency reflecting the higher sovereign risk.
Says it right there..
Please go an play your word games somewhere else.
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clutchcargo
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Re: KHR fixed term deposit

Post by clutchcargo »

samrong01 wrote: Wed Apr 07, 2021 6:08 pm
clutchcargo wrote: Tue Apr 06, 2021 10:28 pm
samrong01 wrote: Tue Apr 06, 2021 9:57 pm I have never said the rates changed after the start of the coronavirus hysteria.
samrong01 wrote: Tue Apr 06, 2021 3:20 pm Cambodia is a small corrupt country with few resources and has recently destroyed its tourist industry which was perhaps 20% of its economy. Because of this you can get higher interest on their currency reflecting the higher sovereign risk.
Says it right there..
Please go an play your word games somewhere else.
Take 24hrs off..
armchairlawyer
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Re: KHR fixed term deposit

Post by armchairlawyer »

daeum_tnaot wrote: Tue Apr 06, 2021 11:44 am Hello everyone,

I am considering making a fixed term deposit in Khmer riel as opposed to USD. One MFI is offering about 1% more interest if it is in KHR. In the past I never would have thought much about this, as the exchange rate has been stable.

However, I note the taking USD 1 and $5 out of circulation. Others have also reported that some banks now are not offering less than $50 bills at ATMs. I am wondering whether this may point to a trend. I would expect that if Cambodia threatened to delink the Riel from the dollar that it would lead to a devaluation of the riel.

Does anyone have any thoughts on the relative risks of term deposit in KHR vs. USD?
Bank deposit risk 101.
Dedollarisation is a policy that they have said will continue. Yes, we may see less USD bills but that is not the relevant point when thinking about risk (unless you keep your money in cash at home).
The main issue is the peg.
The risk is that it becomes unsustainable.
When pegs break, there tends to be a sudden move down, see Thailand in 1997.
Then you have the redenomination risk that USD deposits get changed into KHR at a reduced rate. This occurs fairly regularly in Latin America .If this occurs, you have gained nothing by having the deposit in USD.
Then you have institutional risk that is specific to individual banks. For this, you need to look at the level of risky commercial real estate lending and the potential for a parent bank to step in to save depositors to protect its name. The banks with the highest profile and quality foreign parents are CIMB, Maybank and ABA.

Of course these risks exist in any country outside of the USA. And you still have institutional risk even in the USA.
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Re: KHR fixed term deposit

Post by Pseudonomdeplume »

Woori. They are Korean and continue making big developments in SE Asia. M&A action in KOW. Focused on foreigners. FD APY was 8%. Finance, particularly banks should do well in 2021 (not a recommendation for a novice), and my Woori are climbing.
I still say High Yield Savings account, or Money Market. Not sure of your expertise on the markets, but a well-rounded portfolio is my best option, easily. There's also robo-advisors or brokers, which take away a lot of control, but give you liquidity. Research, research, research, then research some more.
Don't make an investment decision on the media, unless it is PURELY factual. They can start off factual, then gradually incorporate opinions. They contradict themselves, sometimes on the same day, and are paid journalists who disclose they have no investment in the stocks mentioned. The people commissioning them do, though.
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