5 Fascinating Facts on Why Cambodia Uses Dual Currency over Its Very Own Cambodia Currency.

Cambodia has a rich cultural heritage and a turbulent past. Interestingly, the story of the Cambodia Currency is equally fascinating. The Cambodian Riel (KHR) is Cambodia’s official currency. In this blog, you will be thrilled to learn about the birth, current scenario, and significance of the Cambodian Riel and also why there is a need for a dual currency system.

Excited Huh!! Just hang on there as we will unfold some of the fascinating facts about the Cambodian Riel. Let’s begin with…….

The Birth of the Cambodia Currency

The Cambodian Riel was first used in 1955, replacing the Cambodian Piastre to stabilise the economy. The name “Riel” is derived from the Mekong River fish. You can understand how important the Mekong River is for the citizens of Cambodia.

The Turbulent Past

During the Khmer regime, between 1975 and 1979, the regime abolished the currency system for creating pandemion among the citizens. Just imagine how the people might have felt during those unprecedented moves. The move definitely left a devastating impact on the country’s economic infrastructure.

Reintroduction of the Riel

After the fall of the Khmer Regime, Cambodia faced the herculean task of rebuilding its economy. You are correct, the Riel was again reintroduced. However, the reintroduction failed to gain public trust. The economy was shattered by then, and the Riel faced tough competition from foreign currencies, particularly the US Dollar.

Now the big and the most important question……..

Why Dual Currency System?

Cambodia operates a unique dual currency system, where the Cambodian Riel and the US Dollar are used interchangeably. The US Dollar is widely accepted, especially in urban areas, while the Riel is more commonly used in rural areas and for smaller transactions.

We were completely taken aback when we were informed that US Dollar is widely accepted across the country. We have travelled to a lot of countries, and for the first time, we felt as if we had landed on the North American Continent; everyone preferred US dollars over their very own Riel. We used the US Dollar in Siem Reap as well as in Phnom Penh.

This dual system reflects the continued challenges in stabilizing the Riel and building confidence in the national currency.

Now let’s see…..

Current Exchange Rates

As of 15 June 2024, the exchange rate stands at approximately:

  • 1 USD = 4,108.73 KHR
  • 1 INR = 49.18 KHR

These rates fluctuate based on global economic conditions and domestic policies. The reliance on the US Dollar provides stability but also highlights the challenges the Riel faces in establishing itself as the dominant currency.

Wait! we are yet to highlight some key facts of the dual currency system….

The Need for a Dual Currency System

1. Historical Instability

The abolition of currency during the 1970s and subsequent economic instability have left an indelible mark on public trust. Rebuilding this trust is a challenging process.

2. Economic Structure

Cambodia is a developing nation and a significant dependency is on agriculture, textiles, and tourism. This economy is not as robust as those of more industrialized nations. T

3. Foreign Aid and Investment

Significant foreign aid and investment inflows are often in US Dollars, reinforcing the dual currency system and limiting the Riel’s growth as the sole currency.

4. Inflation Control

There have been instances where high inflation has undermined the confidence in the Riel. While inflation has been controlled recently, past experiences made the population more cautious. The US Dollar, being more robust to inflation than the Riel, provides a safer alternative for savings and transactions.

5. Ease of Trade and Tourism

Last and the most important thing is that the use of the US Dollar simplifies transactions for tourists and international traders, making Cambodia a more accessible destination for both.

Now we hope you have a clear idea as to why people prefer the US Dollar over their national currency. This is just a fascinating tale and we loved narrating as much as you love reading.

If you wanna know more. Do check out their wiki page.

What are you waiting for??? Just plan your perfect trip to Cambodia.

Wait! We are not going anywhere without this last question……    

What kind of help are we going to provide?

Let us inform you that we prepare itineraries not only for anywhere in India but also for Asia. We have been travelling since we were toddlers. So here in our blogs and stories, we will give you a glimpse of our journey and help you plan your trip.

Read about our Uzbekistan blogs.

Read about our Kazakhstan blogs.

Read about our Singapore blogs.

Read about our Vietnam blogs.

Read about our Cambodia blogs.

Read about our Bali blogs.

Read about our Kuala Lumpur blog series.

Read about our Sri Lanka blogs.

Read about our Nepal blogs.

Read about our Char Dham blogs.

Read about our Ladakh blogs.

Read about our day trip to Hyderabad.

Read about our Madhya Pradesh blogs.

Read about our Andaman and Nicobar blogs.

Do follow our Instagram handle @mindfulllofvacations and watch for the next destination story of a new place. For any query related to any trip, drop a mail at @mitkau007@gmail.com.

by mitkau

    Leave a Reply Cancel reply