Washington
04 February 2008
Many Cambodians still misunderstand the benefits of banking and finance, preferring the dollar to the riel and avoiding savings accounts to their detriment, a bank official said Monday.
Channy Ung, director of Acleda Bank, the third largest in bank in Cambodia, said that putting just a little money in the country’s banks would increase their ability to distribute credit. At the same time, people would earn interest, he said, something they cannot get from money stashed at home.
The Khmer Rouge abolished banks and money, in an era that saw several regime and currency changes, leading to a deep-rooted distrust of banks.
But a large increase in the number of people making deposits meant trust was returning, Channy Ung said, as a guest on “Hello VOA.”
About 90 percent of the money deposited in 2007 was in US dollars, however, he said, showing that people still did not trust the national currency.
The riel had not lost its value, he said, and inflation has been steady for a long time. But the national bank still does not require the sole use of the riel.
Channy Ung said the banks existed as a place for financial safety, which could include freezing assets of criminals at the behest of the national bank and courts.
“But so far there is no money freezing against any company without reason and without proper authorization from the Central Bank,” he said.
Channy Ung, director of Acleda Bank, the third largest in bank in Cambodia, said that putting just a little money in the country’s banks would increase their ability to distribute credit. At the same time, people would earn interest, he said, something they cannot get from money stashed at home.
The Khmer Rouge abolished banks and money, in an era that saw several regime and currency changes, leading to a deep-rooted distrust of banks.
But a large increase in the number of people making deposits meant trust was returning, Channy Ung said, as a guest on “Hello VOA.”
About 90 percent of the money deposited in 2007 was in US dollars, however, he said, showing that people still did not trust the national currency.
The riel had not lost its value, he said, and inflation has been steady for a long time. But the national bank still does not require the sole use of the riel.
Channy Ung said the banks existed as a place for financial safety, which could include freezing assets of criminals at the behest of the national bank and courts.
“But so far there is no money freezing against any company without reason and without proper authorization from the Central Bank,” he said.
8 comments:
One way to move away from the US dollar thus diversify the country from a single currency and still have the Cambodian people trust the Riel would be to peg the Riel to a basket of currency or maybe a few currency. I would propose a peg to the world major currency. For every Riel the National Bank of Cambodia printed it should be back up by 25% dollar, 25% Yen, 25%Chinese Yuan, and 25% Euro.
Good idea to get our people to trust in Riel.
The big question mark is nations wide world must also recognized that Riel is a legal tender locally and through their world. Thus financial institutes shall do their bit to diversify and promote trust in Riel.
It's not a problem with the Riels. But, the utmost important is to have the public Trust the Banking Systems in Cambodia. Over here we have FDIC, what does Cambodia has?
Stolen! Corruption!
I agree. Good advice. Yes, Cambodia will need help to gain trust again in their Riel currency, thanks to many years of conflict and war. I'm sure, gaining the Cambodian trust will take a little while because of their bad experience of unstability; however, it is still a very good idea to introduce Cambodians to use their currency again. But they will need a lot of supports and backing up from the US dollar and foreign banks. On behalf of Cambodia, i thank you for the rich countries supports with this project.
I think the gov't should also look at the transation of Thai baht, and Vietnam Dong in the provinces along where border with Thaiand and Vietnam respectively. It was confusing me when I went to the restaurant at the border and the cashier ask me in Baht or Dong, So I ask to myself that is that I standing on Cambodian teritory or neiboring's teritory? I think it's unlawfull, and the powerless regulation to enforce business trade in Cambodian Riels. The gov't should promote Riels even in Supper market, Hotel, Restaurant and other transation. Before we relied on US Dollars for reserving but in that time we are in the wartime but now we have peace thus I'm appeal to the gov't to rethinking about Rielization in Cambodia society.
Independent Economist.
I hear you. I read many travels mentioned the same thing, especially at provinces bordering Thailand and Vietnam. Some traveler books even boast that in the Western borders of Cambodia with Thailand, business demand their customers to use baht. And is also true along the border provinces with Vietnam as well, business thinks it's ok to use dong. I think it is time now for Cambodia to honor its own Riel currency at these border areas and provinces. It's not hard to enforce this; just educate the border provinces' governors and member of parliament people to issue gov't directive to strengthen the Cambodian national currency, the Riel and stop using the baht or the dong at border areas on Cambodian soils. I'm sure Thailand and Vietnam wouldn't want their provinces to use the Cambodian Riel, so why should Cambodia treat Thailand and Vietnam special in this regards? I would appeal to everyone, tourists and natives alike to encourage people and businesses to start using the Riel more, to please have some respect for Cambodian law and custom. Again, this is how Cambodia can slowly but surely going back to use its own currency again. We got to start somewhere and everyone can help with this, including gov't, tourists, and all businesses if we want to steer Cambodia away from its dependency on foreign aid. it looks to me that cambodia is probably the only country in the world that don't really use its own currency. Correct me if i'm wrong. i know, it's probably is very hard to change, but we got to start somewhere or we're never going to get things done. Common, let's be proud and start using the Khmer currency again; let give it value like in the good, old days.
Let say a bank provides its own insurance for each deposit. The next thing when the bank goes under water, who will be responsible to do compensation because the bank is gone. Depositors file complain/petition with the court, this is looks like to catch a dream.
The buttom line people don't trust the banking system and the government. Some of top officials in Phnom Penh have their accounts with banks because they make clear to the bank that
"The bank's officials lives and families at stake if the money belong to the high ranking officials were lost"
The reason why the vast majority of Cambodian people do not trust the Cambodian financial instutions due to the fact that when problems occure in the coutnry, the leaders will callously bail out with their money. Therefore, I believe that the vast majority of Cambodian people are doing the right thing by hidding their money. Moreover, Mr. Chea Chanto understands this problem very well.
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