Following four US dollar auctions by the National Bank of Cambodia (NBC) in the past two weeks, the riel exchange rate against the US currency has stabilised. The central bank noted that it will continue to hold the auctions for the next four weeks.
In its September 18 statement, the NBC said it is committed to managing fluctuations of the US dollar in international markets, in accordance with the evolution of the current and future macroeconomic situation in Cambodia.
It said a stable exchange rate would strengthen the purchasing power of the riel, while contributing to the continued recovery of the Cambodian economy post-pandemic.
In Channy, president and CEO of public-listed ACLEDA Bank, supported the NBC’s interventions, noting that it protects the value of the local currency.
He said that while the central bank cannot regulate foreign currency, it can maintain the stability of the riel.
“The work the NBC has done in the past has improved the value of the riel significantly. Further intervention would maintain its value going forwards. This is not something that can be done once, it needs to be carried out whenever major fluctuations occur,” he explained.
Channy added that ACLEDA has previously participated in six bids, for more than $24 million.
Hong Vanak, an economics researcher at the Royal Academy of Cambodia, noted that intervention in the financial markets of Cambodia is the sole responsibility of the NBC, and an appropriate response to ongoing issues.
He explained that without its intervention, exchange rates would fluctuate, which could affect the use of the riel across the country.
“Ensuring a stable exchange rate between the riel and the dollar is a sensible measure. More work may be required, unless the government can find ways to boost the spending of riel, especially through boosting the production of local products and maximising consumption,” he said.
According to the NBC, the sales are scheduled twice a week, on Wednesdays and Fridays, for the next four weeks.