I'm not an Economist but, something about this just seems wrong>

PHNOM PENH – The National Bank of Cambodia (NBC) is releasing another $30 million in addition to the $80 million already released in auction throughout September to stabilize the riel currency exchange rate and to rebound the economy.

The $30 million auction will be done on Sept. 27 and Sept.29 with $15 million to be released on each date, according to an NBC statement dated Sept. 22.

The NBC has held several US dollar auctions with all banks, microfinance institutions and money changers since Sept. 6, totaling $80 million being released since the beginning of the month.

NBC released $10 million on Sept. 6, $15 million on Sept. 8, $10 million on Sept. 13, $25 million on Sept. 15, $10 million on Sept. 20 and another $ 10 million on Sept.22

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.....On Sept. 22, the US dollar rose to its highest levels against the euro, the pound and the yen since at least March. After falling as low as 104.66 earlier in the day, the U.S. dollar index was higher at 105.6 prices as of Sept. 25.

The release of $80 million has helped maintain the riel exchange rate against the US dollar to an appropriate level for the market situation, but the National Bank will continue to intervene until the exchange rate situation in Cambodia stabilizes.

https://cambodianess.com/article/nation ... hange-rate

Why does it seem wrong?
It’s one tool the NBC has to control price of Riel. It’s a fairly common practice. A couple of years ago they did it fairly regularly throughout the year.

khmerhamster wrote: ↑Wed Sep 27, 2023 10:33 am Why does it seem wrong?
It’s one tool the NBC has to control price of Riel. It’s a fairly common practice. A couple of years ago they did it fairly regularly throughout the year.

Yes, all mational banks do it to manage the exchange rate of their currency. If they want to weaken their currency it is no problem, they simply print it and sell it. However, if they want to strengthen it , there is a limit to how much USD they hold and can sell. As Thailand discovered in 1997.
Hopefully it will be all right because the US deficit position is so bad that sooner or later the USD must crash. With a lot of government debt (at low rates) coimg due, it must be replaced by new debt at 4.5% + and then the US will be spending a large part of their tax revenue simply paying interest on their debt, and meanwhile they are showing no signs of reducing spending, quite the opposite in fact.
If they don't curb public spending radically, they either have to tax the hell out of corporations and individuals or carry on with an increasing deficit - and that will lead to a USD crash and probably the end of reserve currency status.

Yes, they're probably trying to get rid of as many federal reserve notes as possible because the US Gov't is on the brink of having another shutdown

No problem. When 2025 gets here all the “tax breaks” individual tax filers received in the 2017 law will revert back to the old tax brackets, although the Corporate tax cuts are permanent.

Alex wrote: ↑Wed Sep 27, 2023 12:43 pm I'm not an economist, but I guess the strong dollar will become a major headache for Cambodia.

The value of dollar was originally due to its gold standard, after which the entire oil market was done in dollars, but now even European countries buying oil in RMB and BRICS already released a international remittance system for trading in their respective currencies, the dollar has only one direction, down.

Reckless lending policy and regulations(as most regulators mysteriously gets hired by the banks they were supposed to regulate) and fines and penalties being only a fraction of the profit gained on illegal manipulation of markets, is not helping the situation. Despite the US government is entitled to the profit(but not dividend) of the federal reserve, it's still owned by other banks. So the same criminals who manipulate the market in their favour and bribes the regulators with 7 figure employment deals, are the same who decide how much interest you pay on your mortgage, and. A few years ago anyone I'm the US could get a mortgage with no cash saved up, and interest rates where 1.5%. Now the same banks decide you have to pay them 5%, and they hope you can't, because it's really your house they are after.

In any normal country the financial regulations are done by the government to ensure a stable market, not by the private sector who seeks to make profit on unstable markets. To believe the US government has any control is foolish, they have since long been serving only the banking and military industry eg. Ukraine, private banks creating debt out of thing air, which mostly goes to the military industry. What the taxpayers get is the responsibility to pay this debt.

Alex wrote: ↑Fri Sep 29, 2023 4:02 pm

Nona wrote: ↑Fri Sep 29, 2023 3:22 pm

Alex wrote: ↑Wed Sep 27, 2023 12:43 pm I'm not an economist, but I guess the strong dollar will become a major headache for Cambodia.

The value of dollar was originally due to its gold standard, after which the entire oil market was done in dollars, but now even European countries buying oil in RMB and BRICS already released a international remittance system for trading in their respective currencies, the dollar has only one direction, down.

And yet, it has been quite strong recently, let's say against CNY and THB. Whatever the longterm prospects of the USD may be, this will now become a problem for Cambodia.

Cambodia export allot to the US so they should benefit from it as a stronger dollar makes it even cheaper to import products from Cambodia vs domestic production.

The downside is that imports paid for with usd will be more expensive at the same time but i dont know how much Cambodia imports with the payment in usd or what impact that would have. But most products are from Thailand and Vietnam i believe? How much does this impact the KHR/THB/VND rate?

I think @phuketrichard attempted to say is selling $110 millions can't make a dent to the current strength of USD.