Discussion to stop use of US $1, $2 and $5 notes

Bitte_Kein_Lexus · Post by **Bitte_Kein_Lexus** » Fri May 29, 2020 3:23 pm

fsdfdsdf wrote:I cant see why they would do this, unless they are running out. how do they get the US cash? is the US buying things by trading them for suitcases of $100 notes?

What's so hard to understand? They want locals to use the national currency... You know, like people do in almost every other country in the world? They have "Riel Day" and a bunch of other events now and then aimed at boosting the use of the Riel.

They've never been really serious about it, only sort of "encouragement", so this is a pretty big step. Start there, then maybe it'll move up the numbers...

That being said, I doubt the country will go full Riel within the next five years though, as now too many Chinese (and Khmer) like using the USD. Hell, I'm damn happy I'm paid in USD... Keeps the trust/economy fairly stable, but I'm guessing it doesn't give the National Bank much flexibility.

Electric Earth · Post by **Electric Earth** » Fri May 29, 2020 5:02 pm

One thing they will need to work on, which I'm guessing they won't, is then making sure to pull shitty riel out of circulation and print fresh to replace it. I get some of them that look like they've been through hell, left in a swampy puddle for a week, and dried in the sun. Once it's being used even more, how long until people have notes that are falling apart?

hunter8 · Post by **hunter8** » Fri May 29, 2020 5:14 pm

What will happen is those notes will still circulate but at a small discount.

fazur · Post by **fazur** » Sat May 30, 2020 6:01 am

angkorjohn2 wrote: ↑Thu May 28, 2020 5:31 pm Imagine a Cambodia full of riel without the luxury of pegging itself to the dollar, the whole country would collapse,

why? india has rupees, vietnam has dong, myanmar, thailand, laos etc.

they have survived, why not cambodia?

i think its a fallacy tbh

Ravensnest · Post by **Ravensnest** » Sat May 30, 2020 12:33 pm

Since the Cambodia bank is "thinking" about not accepting any $1 or $5 dollar bills since they have a surplus of them, it appears many of the locals, that have probably never had a bank account in their life, are starting to not accept $1 bills. The only problem created by this is the worry of the locals and they are putting the strain on themselves and others by not accepting small US bills.

Last night, my wife comes into the bedroom in a panic asking me to research a video she saw on FB. It was the same video I researched yesterday when I saw it. The local education level has lower-level financial classes panicking at small things. Last night and today I've tried explaining that it would not affect anyone who does not have a bank account. She's never had one in her life and doesn't plan on it. I still think if anyone tried giving her a $1 bill as change she is not going to accept it. We shop at the local market and I have a feeling most sellers there do not have a bank account. The locals putting the strain on themselves and the irony in that was funny to me for a minute. But now that I've had issues shopping all morning, it's gotten downright annoying.

siliconlife · Post by **siliconlife** » Sat May 30, 2020 12:40 pm

Agreed. Classic case of a low-trust society clusterfuck. My wife is also kicking off, complaining about "why Khmers do this kind of thing to each other". I'm just trying to stay calm and not let it annoy me, chanting the mantra "These things happen in the developing world, these things happen in the developing world,"

Post by **Username Taken** » Sat May 30, 2020 1:06 pm

My wife raised the issue this morning like it was the beginning of the end of the world as we know it.
I assured her that 10, 20, 50 and 100 dollar bills will still be accepted so there's no problem. And if someone needs to give you change equivalent to $1, they will give you 4000 riel. So, what's the problem?
She will sleep well tonight after being reassured.

Yet again, I blame the Facebook experts for stirring the pot.

AzalKH · Post by **AzalKH** » Sat May 30, 2020 1:42 pm

Electric Earth wrote: ↑Fri May 29, 2020 5:02 pm One thing they will need to work on, which I'm guessing they won't, is then making sure to pull shitty riel out of circulation and print fresh to replace it. I get some of them that look like they've been through hell, left in a swampy puddle for a week, and dried in the sun. Once it's being used even more, how long until people have notes that are falling apart?

Perhaps new notes, 5000 and above maybe, will be plastic like the 15000 one is and they will phase out the paper ones eventually

newkidontheblock · Post by **newkidontheblock** » Sat May 30, 2020 2:05 pm

Duncan wrote:Along with outdated things like Checks / Cheques. Who in their right mind would accept a bit of paper promising to give money when you take it to a bank, when you can get that money directly paid into your bank account using internet banking.

Checks leave a clear paper trail. It says what it’s for, and who cashed it, and where it got cashed out, when it got cashed out. If there is ever a dispute with a government entity - IRS, Attorney General, FBI, or go to court, etc., the trail is there.

Internet banking is ones and zeros, usually paid into another bank account. Not so convenient to find among dozens of transactions. And not so clear as to why it was paid out.

An even higher level are cashier’s checks/money orders. Big purchases such as cars and houses do not accept internet banking. These transactions want reserved money behind it.

armchairlawyer · Post by **armchairlawyer** » Sat May 30, 2020 3:53 pm

The reasons for the new policy as stated by the NBC are:
1. They are the only body that can export used (and usually broken) USD notes and they want to reduce costs. From August, they will pass the cost associated with the export of small bills onto the banks and MFIs. That may well lead to the banks and MFIs refusing to accept the small bills from their customers.
2. The move will promote dedollarisation. Dedollarisation would give the NBC more control over monetary policy and the government more control over fiscal policy. However, this new move will have little impact because the bills are low value and prices can still be quoted in USD.
3. The riel exchange rate has fallen against the USD. The NBC puts this down to a "slowdown in economic activities and a decrease in paying taxes in riel." Maybe, but the USD has been strong across the world and any country trying to maintain a peg has been struggling.

In the markets, food is typically priced in riel but soaps and shampoos etc in USD. I think the small USD bills will fall into disuse and the riel exchange rate will stay well over 4000 so things will get fiddly for stuff priced in USD that is paid for in KHR. The sellers are already giving change based on rates worse (i.e higher) than 4100. Checking your change is hellish in these transactions. Buyers may suffer a bit as a result.

Discussion to stop use of US $1, $2 and $5 notes

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Re: Discussion to stop use if US $1, $2 and $5 notes

Re: Discussion to stop use if US $1, $2 and $5 notes

Re: Discussion to stop use if US $1, $2 and $5 notes

Locals Really Worried and Not accepting $1 and $5 Bills

Re: Locals Really Worried and Not accepting $1 and $5 Bills

Re: Discussion to stop use if US $1, $2 and $5 notes

Re: Discussion to stop use if US $1, $2 and $5 notes

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Re: Discussion to stop use if US $1, $2 and $5 notes

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