CAMBODIA PLANS TO LIMIT U.S. SMALL NOTE USE

The National Bank of Cambodia has launched a plan (28th May) in which they are asking commercial banks and microfinance institutions to send it their smallest U.S. dollar banknotes to their offices for processing and transporting outside the country. In an effort to withdraw these smaller U.S. notes from commerce and support their currency, the Riel, The National Bank cited the notes are difficult and costly to manage in terms of processing and transport.

Speaking at the meeting, National Bank of Cambodia Director-General Chea Serey commented the National Bank confirmed they found the three smallest denominations of one, two and five U.S. dollar banknotes challenging to manage and conceded there is little demand for the overall in the Cambodian economy. Currently, the official National Bank exchange rate of one U.S. Dollar equals just over 4100 Riels, and as such, 5000 Riel notes could easily replace one dollar banknotes which routinely circulate. An updated series of the most commonly used riel banknote denominations were issued from 2013 to 2018, and Riel coins are seldom used.

The National Bank confirmed there would be a three-month deadline beginning from the 1st June for commercial Banks and Microfinance institutions to collect their supply of these notes and return them to National Bank central offices. Here, they will be processed one final time and transported outside the country to additional destinations.

In the last six months, the riel has depreciated noticeably against the U.S. dollar and with the current economic slow-down worldwide due to the pandemic arising from the spread of the Wuhan-strain of COVID-19, the downward spiral has continued.

To read the complete article, see:
Cambodia: National Bank unveils plan to limit use of $1, $2, and $5, U.S. dollar banknotes from domestic transactions (http://news.coinupdate.com/cambodia-national-bank-unveils-plan-to-limit-use-of-1-2-and-5-u-s-dollar-banknotes-from-domestic-transactions/)

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