Money for nothing as visitors from Vietnam empty dollar-filled ATMs

Jan 28, 2011
DPA

Phnom Penh - Day-trippers from Vietnam have withdrawn millions of dollars from Cambodian cash machines to benefit from a sizeable gap between the official and black market rates of the US dollar and Vietnam's currency the dong, local media reported Friday.

Cambodia uses the dollar as a second currency along with its own currency, the riel.

The chief executive of Cambodia's ANZ Royal Bank, Stephen Higgins, told the Phnom Penh Post newspaper that customers of Vietnam's Techcombank had withdrawn 12 million dollars from his bank's cash machines since December.

They then exchanged those dollars into dong with currency traders, who offer the black market rate of 21,000 dong to the dollar, around 8 per cent above Hanoi's peg of around 19,500.

Because Techcombank processes the transactions at the official rate and charges very low international transaction fees, the customer banks a profit.

Even with charges, said Higgins, that would amount to 20,000 dollars per million dollars withdrawn.

'It's one of those things where one person figures out this is a way to make money, tells a few people who tell a few more people, and suddenly you get busloads of people coming across the border to try and do it,' Higgins said.

Customers of ANZ Royal, a part-owned subsidiary of Australian banking giant ANZ, could draw a maximum of 2,000 dollars in cash a day, although the bank has now cut that to 500 dollars.

Higgins said staff had noticed people withdrawing large sums of money using numerous different cards for each transaction. He said Techcombank's customers were running the same scheme at other banks in Cambodia and in the region, including in Singapore and China.

The arrangement has likely cost Techcombank 1.5 million dollars on withdrawals of at least 20 million dollars in recent weeks.

The newspaper said Techcombank was working with international credit card firm Visa to bring in new fees that would remove the arbitrage benefit.